South African small firms’ lender, Real People, is once more seeking to delay paying bondholders for the third time as it kicks off talks to settle the debt in nine years.
Last year, when the bond matured in August, Real People said it had met the investors of the Sh1.3 billion notes to renegotiate terms for the bond and they agreed to wait for payments till last January.
However, in January the lender again sought relief from its creditors for another eight months but it is now seeking another extension to February.
“At a meeting held in August 15, 2019 the noteholders by means of extraordinary resolutions resolved that the maturity date for the 3 year note due August 3 2019 be extended to February 28 2020,” the firm said in a notice yesterday.
The firm had declared insolvency and said it was headed for default on its three-year Sh267 million medium-term note that matured last year. Its ability to meet payments for the five-year Sh1.036 note that matures in 2020 was also in question.
The current extension is to allow the firm to look for a strategic investor to buy a stake in the firm and help settle the debt in the next nine years — over four tranches in 2022, 2024, 2026 and 2028.
“Subject with securing an agreement with an investor whose identity shall be approved by noteholders holding 75 percent of the notes by February 2020, the final maturity dates for all the notes be extended to July 24, 2028,” Real People said.
Last year, the firm failed to convince all the bondholders to convert their bonds into shares with some opting to wait for their dues. Real People is required to pay interest on the loans so as not to completely default.
“The interest shall be paid on and be determined on certain dates which have been identified based on the trust deed and consistent with the manner in which the interest is currently paid and determined,” Real People said.
Another lender, Consolidated Bank of Kenya, also failed to meet a Sh1.6 billion bond that matured this month and sought Treasury’s bailout.