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No notice to repay S$100m notes received from trustee so far: BreadTalk

BREADTALK Group has not received notice from its trustee to immediately repay its S$100 million notes due in 2023, following its technical breach of the relevant financial covenants, the food and beverage player said on Wednesday in response to queries from the Singapore Exchange Securities Trading (SGX-ST).

The SGX-ST queried whether noteholders or the trustee are required to take any action to call for an event of default given the breach, whether the breach is capable of remedy and whether there is any remedy or grace period before an event of default is called.

BreadTalk said that the breaches are not capable of remedy since they are a result of the company's FY2019 performance, and prospective changes to the performance will not remedy the breaches. As a result, an event of default has already occurred.

Given that an event of default has occurred, the trustee may give notice in writing to the company that the notes are immediately repayable with accrued interest, referred to as an acceleration. However, it is not bound to do so unless it is requested to do so in writing by the holders of at least 25 per cent of the principal amount of the notes or directed to do so by an extraordinary resolution, and the trustee should also be indemnified and/or secured and/or prefunded to its satisfaction by the noteholders against all actions, proceedings, claims and demands.

"As mentioned in the breach announcement, the company is currently evaluating all viable and available options in respect of the aforesaid breaches (including waivers and amendments to the relevant financial covenants)," BreadTalk said.

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SGX-ST also asked BreadTalk to advise on the implications of its breaches of certain bilateral bank loans, mentioned in its financial results announcement on Monday.

The company said it has reclassified the affected loans from non-current liabilities to current liabilities and is making efforts to engage its principal bankers and seek their support.

So far, none of the banks have stated an intention to withdraw or terminate any of their financing lines extended and/or currently outstanding with BreadTalk.

BreadTalk's board is of the opinion that the group can operate as a going concern for a reasonable period of time, it said in response to an SGX-ST query on that issue. However, it added that there is no certainty that its management's recovery plans to mitigate the effect of the breaches and/or actions to address the breaches will be successful. It will suspend trading in its shares should the company and group no longer operate as a going concern.

Separately, BreadTalk has requested for the trading halt on its shares to be lifted. Its shares last traded at S$0.645 on Feb 21, up one cent or 1.57 per cent.

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