MTD Walkers PLC supported by NDB Investment Bank, the Bank of Ceylon Trustees and Nithya Partners representing the interests of the investors to their debenture, has restructured MTD’s debenture obligations, MTD officials said. “MTD Walkers PLC with the support of more than 75 per cent of the debenture holders cleared the hurdle of the debenture [...]

Business Times

MTD Walkers says most debenture interest paid

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MTD Walkers PLC supported by NDB Investment Bank, the Bank of Ceylon Trustees and Nithya Partners representing the interests of the investors to their debenture, has restructured MTD’s debenture obligations, MTD officials said.

“MTD Walkers PLC with the support of more than 75 per cent of the debenture holders cleared the hurdle of the debenture payment. The company which had about Rs.2.1 billion outstanding on the debentures along with Rs. 149 million in interest payments has fully paid off the due interest in line with the existing trust deed,” a company official told the Business Times. But MTD still needs to pay much of the capital. Late last month MTD announced they obtained consent from the majority debenture holders to delay the redemption of their debentures by a year, with a promise to offer an additional 2 per cent interest.

The company, contracting mostly state-funded infrastructure projects, raised Rs.3 billion in a debenture issue in 2015. The instrument carried two types based on tenors and rates.

According to the disclosure made by the company to the Colombo Stock Exchange on September 28, the Type A debenture interest rate was increased from 9.75 per cent to 11.75 per cent and Type B debenture from 10.25 per cent to 12.25 per cent per annum upto maturity.

“As part of the restructuring, 49.04 per cent of the Type A debentures was purchased through the trading system of the Colombo Stock Exchange (CSE) for debenture holders who held over 100,000 of these debentures. The balance Type A debentures was extended for another 12 months,” the official said. Holders of Type A debentures with 100,000 debentures or less were offered buyouts in full, he said noting that this restructuring was done to better align the company’s debt obligations with the cash flows from its ongoing projects.

In a disclosure to CSE last month, in response to a letter sent to them mid-September by the CSE, MTD Walkers PLC said that they are aware of the obligation to repay the Type A debentures in line with the obligations as per the debenture trust deed.

The disclosure also noted that payment of principal amount and interest of debentures – KAPI-BD-30/09/18-CC2316-9.75 is maturing on September 30.

Shortly after that the CSE imposed a halt on MTD Walkers shares and sought clarification from MTD on debentures.

Recently MTD Walkers was at the centre of controversy over Jehan Amaratunga, Executive Deputy Chairman at MTD Walkers PLC facing allegations of securing a Rs. 10 billion loan whilst holding a position of Director at People’s Bank (PB). MTD is plagued with sharp losses and most recently an image loss as well.

Malaysian MTD Capital Bhd has 90.7 per cent in MTD. MTD Capital underwent a management change recently with a new appointment at Group CEO level. This change also saw MTD’s parent conducting an internal audit which precipitated in certain officials resigning – amongst them the CFO.

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