Banyan Tree says able to repay S$100m 4.85% notes due June 5

BANYAN Tree Holdings on Tuesday said it will be able to repay its S$100 million fixed-rate notes maturing on June 5, 2020 with a coupon of 4.85 per cent, after taking into consideration its working capital, cash and bank facilities.

The hospitality group was responding to queries from the Singapore Exchange on its 2019 annual report. It added it is exploring all possible options including equity capital fundraising.

This comes as companies all over the world face a liquidity crunch and are raising cash or are in the process of raising cash to withstand increasing uncertainties amid the Covid-19 pandemic.

The company will be seeking shareholders' approval for a usual general share issuance mandate at its upcoming annual general meeting (AGM) to be held on May 6. If approved, this will help facilitate such equity capital fundraising for the rest of the year, within the parameters under listing rules and when the board deems necessary.

In its response to shareholders' questions on May 1 in light of the upcoming AGM, the group said it is currently embarking on three types of cash conservation measures which it expects to save some S$70 million for the financial year ending Dec 31, 2020.

The first is reducing operating expenses such as unpaid leave programme for associates, wage and hiring freeze, minimisation of utility consumption, the deferment of spending on operating cost, among others.

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The second is cessation or suspension of non-critical expenditure and the third is discussion with banks on moratorium of principal and interest repayments.

The group said the worsening environment for the hotel industry amid the novel coronavirus outbreak is already affecting demand at Banyan Tree's hotels. The group is experiencing cancellations, as well as a decline in forward books and transient business. Transient business in the hospitality sector generally refers to short stays.

Banyan Tree shares closed at 27 Singapore cents on Tuesday, up 0.5 cent or 1.9 per cent, before the announcement.