LIPPO Malls Indonesia Retail Trust (LMIRT) upsized its term loan facility to 4.5 trillion rupiah (S$371.8 million) from 2.5 trillion rupiah previously. The original loan – obtained in May – came with an average life of about eight years, based on the facility agreement.
On Thursday (Jun 27), LMIRT’s manager said that the trust has on Jun 7 drawn down and used 2.3 trillion rupiah to prepay its secured bank loans that are denominated in Singapore dollars. Proceeds from the upsized facility will be used to finance the purchase of outstanding 7.5 per cent senior notes due 2026. They will also be used to pay a consent fee related to the consent solicitation for these notes, as well as other related fees and expenses. The senior notes are unconditionally and irrevocably guaranteed by Perpetual (Asia), the trustee of LMIRT.
In a separate announcement, the real estate investment trust (Reit) said that it started a consent solicitation process to amend certain provisions related to notes due 2026. In 2021, LMIRT issued US$200 million senior notes at 7.5 per cent. In May this year, it issued another US$17.6 million notes at 7.5 per cent.
The proposed amendments include substantially eliminating restrictive covenants and reporting requirements, as well as certain events of default in the contracts of the issued notes. As part of the upsized facility agreement, changes to LMIRT’s single largest unitholder and LMIRT management’s shareholder will be considered a mandatory prepayment event.
Currently, the Reit’s single largest unitholder is Lippo Karawaci, a real estate and healthcare platform in Indonesia. Therefore, a change in control of Lippo Karawaci would also trigger a mandatory prepayment event for the Reit.
If the prepayment event occurs, the aggregate level of loan facilities that may be affected as at Thursday is about S$260 million, excluding interest.
A NEWSLETTER FOR YOU
Friday, 8.30 am
Asean Business
Business insights centering on South-east Asia’s fast-growing economies.
Meanwhile, the aggregate level of loan facilities of LMIRT Capital and the trust’s other subsidiaries that may be affected as at the date of this announcement is about S$723.4 million. “This does not take into account the amount of the loan facilities which have not been drawn down, including those in respect of the upsized facility,” said the manager.
On Tuesday, the manager said LMIRT’s aggregate leverage ratio is estimated to range between 45 and 45.2 per cent, up from the last disclosed 43.7 per cent as at end-March. This came mainly as the rupiah appreciated by a significant 3.5 per cent against the Singapore dollar, reducing the value of LMIRT’s assets after translation into the latter currency.
However, the manager noted that the Reit’s existing loans do not contain any financial covenants linked to the aggregate leverage limit, and that the trust remains in compliance with financial covenants in its existing loans. The 45 to 45.2 per cent gearing range estimated by the manager remains subject to the finalisation of the Reit’s unaudited financial statements for the second quarter ending Jun 30.
Units of LMIRT were trading flat at S$0.012 as at 9.43 am on Thursday.
