Singapore-based Grindrod Shipping has agreed amendments to three of its credit facilities relating to the financial covenants and the minimum required security value ratio.
The company entered into amendments to its USD 27 million facility dated December 9, 2017 with DVB Bank SE, USD 100 million loan dated May 8, 2018 with Credit Agricole Corporate and Investment Bank, DVB Bank SE and Standard Chartered Bank, Singapore Branch and USD 29.9 million facility dated December 21,2018 with NIBC Bank N.V.
Grindrod Shipping explained that the amendments in respect of the financial covenants, applicable from June 30, 2019, lower the amount of the minimum book value net worth covenant; introduce a new working capital covenant; and clarify the treatment of assets and liabilities that will be reflected in financial statements from January 1, 2019 as a consequence of the adoption of IFRS 16, Leases.
Further, the minimum security value ratio in the USD 100 million facility was also amended.
Namely, the book value net worth covenant was revised for each of the facilities such that the minimum book value net worth covenant was amended from being set at USD 265 million in 2019 and 2020 and USD 275 million thereafter to the lower of the aggregate of USD 240 million plus 25% of the amount of positive retained earnings plus 50% of each capital raise; and USD 275 million.
Additionally, a new covenant has been added to each of the credit facilities that requires positive working capital, such that consolidated current assets must exceed the consolidated current liabilities as evidenced in the latest accounts as of each June 30 and December 31.
The minimum security value ratio in the USD 100 million facility has been amended from a range from 130% to 145% to being set at 135% for the duration of the loan. The minimum security value ratio was not amended in the other two facilities.