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BH Global's joint venture company breaches bank covenants
MAINBOARD-LISTED BH Global Corporation Limited (BHG) announced on Friday that its joint venture company, Gulf Specialty Steel Industries LLC (GSSI), has breached loan covenants.
BHG said in a statement: "GSSI is in breach of certain loan covenants relating to the requirement to maintain a debt equity ratio and debt service coverage ratio as stipulated in its banking facility agreement as at Dec 31, 2016."
The company, which provides engineering services to the marine and offshore, and oil and gas industries, has provided a corporate guarantee proportionately to its shareholding in GSSI of S$18.1 million for banking facilities undertaken by GSSI.
The total bank borrowings drawn down by GSSI was S$38.8 million as at Dec 31, 2016.
BHG said that it will continue to provide financial support to GSSI for it to meet its liabilities. GSSI is in discussion with its banker to remedy this beach and had not received any notice from the bank.