8th Jul 2016 12:10
LONDON (Alliance News) - MirLand Development Corp PLC Friday said its lender has agreed to amend the terms of the company's USD160.0 million worth of loans by extending repayment dates.
Russian-bank Sberbank has provided the USD160.0 million to MirLand to finance the company's operations in Russia and has supplied that amount through various loans to MirLand and its subsidiaries.
The amended agreement unveiled Friday will take effect in two stages.
The first stage will involve deferring repayments that are due under three of the five loans provided that are currently in arrears. Around USD3.6 million is outstanding from those three loans.
The MAG loan repayment of USD1.1 million and the Hydro loan repayment of USD600,000 will now be due to be repaid by September 20, 2016, while the USD1.6 million owed under the Saratov project loan will be deferred until August 20, 2016.
That means the payments will be made later than originally agreed, but will not constitute a breach of the loan agreements.
Additionally, the repayment schedule for the Century loan, which is not in arrears, has been amended and the principal repayment of USD300,000 is now deferred until September 28.
MirLand will also be able to make early repayments toward those loans without incurring a fine and MirLand said the interest rates on those loans have been "slightly reduced".
The second stage of the agreement will only become effective if MirLand meets certain conditions.
MirLand will have to retain and pledge its subsidiaries as security for the loans and agree to certain debt service cover ratios. One of MirLand's subsidiary's, Petra, will have to agree to use 60% of the cashflow generated from the sale of certain properties being built toward making early repayments of the loans, after clearing the loan provided by Sberbank specifically for Petra's Saint Petersburg project.
If achieved, then the repayment schedule for the loans provided by Sberbank will be amended so around 81% of the principal balance will be repaid during the first quarter of 2026 with the remaining 19% repaid on a quarterly basis until that date.
"The company intends to fulfil all of the above conditions in order to give effect to the debt settlement. However, at this stage there is no certainty that the above conditions will be satisfied and that the debt settlement will become effective. The company will make further announcements in due course," said MirLand.
MirLand shares were up 1.5% to 16.50 pence per share on Friday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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