RE: So is this a viable business?21 Aug 2020 14:59
Kenni
In addition, since 8 July 2020 the Group's leverage and interest cover financial covenants for the testing period ended on 30 June 2020 have been deferred under the terms of the Stable Platform Agreement. Without the deferrals contained in the Stable Platform Agreement, the Group would have breached the financial covenants contained in its financing agreements in respect of the testing period ended on 30 June 2020. In the event that the Proposed Refinancing is not agreed or finalised by 30 September 2020, if the Group is unable to obtain a further deferral or waiver of the financial covenant testing for the period ended on 30 June 2020, there is a risk that an event of default may arise prior to May 2021. If such an event were to occur, the requisite majority of the Group's creditors would have the right to vote to declare the Group's debt liabilities immediately repayable.
The uncertainties regarding (1) the Proposed Refinancing not completing before the debt becomes payable, and (2) the risk that the Group is unable to obtain a further deferral or waiver of the financial covenant testing in the event that the Proposed Refinancing does not complete before 30 September 2020, or, in the event the Proposed Refinancing does complete, the revised covenants are subsequently breached in downside commodity price and production scenarios; and the impact these could have on the Group's debt facilities becoming repayable on demand in the next 12 months creates material uncertainties which, therefore may cast significant doubt on the Company's ability to continue as a going concern.
However, based on the agreement of heads of terms with a subset of the Group's lenders, the Director's believe that the completion of the Proposed Refinancing is probable and, in the event the Proposed Refinancing does not complete, the Directors remain confident that an alternative agreement with its creditors would be reached. Once the Proposed Refinancing and other Corporate Actions are complete, extending maturity of the Group's debt facilities is extended to March 2025, the Directors would have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Therefore, the Directors continue to adopt the going concern basis of accounting in preparing these consolidated financial statements and the financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.
Business risks
Premier's business may be impacted by various risks leading to failure to achieve strategic targets for growth and loss of financial standing, cash flow and earnings, and reputation. Not all of these risks are wholly within the Company's control and the Company may be affected by risks which are not yet manifest or reasonably foreseeable.
All it says is they would expect to come to a agreement, nothing in stone mate, if that scenario was
Sign In
Follow the stocks
