AusGroup in breach of financial covenant under a trust deed

AUSGROUP Limited has breached a financial covenant under a trust deed for the S$110 million notes issued under a multi-currency debt issuance programme.

It said on Tuesday that its consolidated total equity for the third quarter ended March 31 has fallen below A$160 million (S$160.5 million), which caused it to be in breach of the financial covenant under the trust deed between the group and DBS Trustee Limited to maintain the company's consolidated total equity to be at least A$160 million at all times.

The notes, issued in September 2014 under the S$350 million multi-currency debt issuance programme, carry an interest of 7.45 per cent and are due to mature this year.

"As a result, an event of default has occurred under the terms of the notes. The company intends to seek waivers from holders of the unsecured notes in relation to the breach and event of default," AusGroup said. "There is no assurance that the waivers will be granted and, if granted, on terms and conditions that are acceptable to the group."