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SUNSHINE Holdings - which breached certain financial covenants under a reported US$120 million loan agreement - said a preliminary financial review by Ernst & Young (E&Y) has been submitted to its creditors.
The Chinese property developer has also defaulted on an interest payment that was due in June to the banks and said it intends for its proposed restructuring plan to address this issue at the same time.
'The company is currently in discussions with its creditors to agree on a plan for the restructuring of its financial indebtedness,' it said yesterday. 'The company would also like to advise that it has not paid any interest due in June to its creditors. The intention of the company is to deal with this issue in the proposed restructuring plan.'
At its creditors' request, Sunshine appointed E&Y in April this year as an adviser to conduct a special financial review exercise and to propose recommendations on the term loan's restructuring.
The company suggested in April a standstill period for at least three months starting March 31, 2009, as well as to defer an interest payment due on March 31 and to be paid under restructured terms.
The interest deferment would mean a default under a facility agreement dated November 2007, which is understood to be a three-year term loan of US$120 million from Deutsche Bank AG, London Branch and United Overseas Bank Ltd, Labuan Branch.
The deferred payment would also trigger a cross default for its US$32 million convertible bonds agreement that is due on Dec 6, 2011, Sunshine said.
Shares of Sunshine closed unchanged at 3.5 cents yesterday.
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