Halcyon Agri seeks bondholders' nod to suspend financial covenants for bonds

Published Tue, Apr 5, 2016 · 12:33 AM

RUBBER processor Halcyon Agri is seeking the consent of its bondholders to suspend the financial covenants for its 2019 bonds, following the announcement of the dual takeover transaction with Shanghai-listed Sinochem International Corp and GMG Global.

The firm is asking for a waiver from compliance to the covenants from March 31 this year to July 31 next year to move ahead with the deal. The covenants will be restored on Aug 1 next year, or earlier if the acquisition falls through or a change of control in the firm fails to take place before Dec 31 this year.

It added, however, that it believes it has sufficient cash flow to continue servicing the notes. The firm will hold an extraordinary general meeting for noteholders on April 27.

Sinochem International is making a mandatory offer for all the shares in Halcyon Agri for 75 Singapore cents each. Under the deal, Halcyon Agri will also make a voluntary general offer for rubber producer GMG Global - majority owned by Sinochem International - involving a share swap of 0.9333 Halcyon share for each GMG Global share.

The transactions are expected to be completed in the third quarter of this year.

DBS Bank has been appointed as the solicitation agent.

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