ZHENENG Jinjiang Environment has not received any request for accelerated repayments on a 2018 loan, despite the technical breaches of one of the covenants of the loan in June and December last year, the waste-to-energy firm disclosed in a bourse filing on Friday.
The company was responding to a Bloomberg report published on May 22, which reported that Zheneng Jinjiang was unable to maintain a minimum interest coverage ratio on test dates in June and September 2019 for a 2018 loan, and that it is still seeking the majority lender consent required to waive the breaches.
The loan in question is a syndicated term facility of an aggregate amount of US$200 million and RMB100 million . The covenant that was breached mandates that the ratio of Zheneng Jinjiang’s consolidated Ebitda for any one-year period ended June or December be not less than 3.0 times its consolidated interest expenses for the same period.
Zheneng Jinjiang confirmed that this ratio had fallen below 3.0 times in June and December last year, resulting in the technical breaches. Under the facility’s terms, the breach of this covenant constitutes a default. If directed by lenders representing at least two-thirds of the commitments, the facility’s agents may demand that all of the outstanding sum would immediately fall due.
However, Zheneng Jinjiang said that it has not received any notice for accelerated repayment from the agents to date. It has been further informed by the agents that none of the lenders have requested accelerated repayments.
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