The manager of EC World REIT says that its lenders have extended the mandatory repayment deadline to Feb 28 from the original deadline of Dec 31, 2022.
The extension comes with two conditions. First, Forchn Holdings Group Co., Ltd., the sponsor of EC World REIT, will have to place a margin deposit of RMB200 million ($38.9 million) in the onshore facility agent’s escrow account. The margin deposit is said to have been paid on Dec 30, 2022.
Next, the sponsor will have to pay $4.4 million to the lenders as partial repayment of the existing offshore bank loans by Jan 6. The money will be funded by the distributions made to Forchn Global, in its capacity as unitholder of EC World REIT, by the REIT for the financial period from July 1, 2022, to Sept 30, 2022.
The payments made by the REIT’s sponsor, which amounts to around RMB222.8 million, will constitute prepayment in part by the purchasers to the vendor. The balance of the equity consideration (amounting to approximately RMB1.15 billion) will be payable to the vendor upon completion.
The manager adds that the majority of the lenders under the existing offshore bank loans and the existing onshore bank loans have obtained their respective internal approvals for the repayment plans. They have also indicated that they do not intend to call for an event of default under the existing bank loans.
The remaining lenders are in the process of obtaining their internal approvals for the repayment plan, continues the manager.
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While the mandatory repayment has not been made by the deadline of Dec 31, 2022, the manager says that the remaining lenders are still obtaining internal approvals for the repayment plan and that there has been no indication that they would call for an event of default.
Units in EC World REIT closed flat at 44.5 cents on Dec 30.