PFC are Total TOAST........31 May 2024 13:59
Furthermore, the Group has NOT been able to meet its contractual obligations to provide performance guarantees in support of certain of the EPC contracts awarded in 2023, and consequently there is a risk that one or more of these contracts could be terminated. In particular, the Group has received a notice of default from a key customer requiring a performance guarantee to be posted by 16 June 2024. Failure to do so would entitle the customer to terminate the contract, which could have a detrimental impact on the liquidity of the Group and the Group’s ability to proceed with the Financial Restructure. The Group has made arrangements to provide the performance guarantee, but requires bank lender consent for the posting of the required cash collateral. Discussions are ongoing but this consent has not yet been provided.
As part of the ongoing discussions, the lender group has required the Group to make preparations for alternative outcomes to a successful Financial Restructure, as set out below. The future intentions of the lender group cannot be known with certainty.
FINANCIAL STATEMENTS
PFC has remained in compliance with its minimum liquidity covenant of US$75 million, with the support of amortisation deferrals from its banks and by not paying the interest coupon on its senior notes that was due on 15 May 2024 and by seeking to defer all but critical creditor payments.
This non-payment constitutes a default under the terms of the senior secured notes, with a 30-day grace period which expires on 14 June 2024. The ad hoc group has entered into a forbearance agreement with the Company, agreeing not to take enforcement action in respect of the non- payment of the coupon until at least 30 June 2024. If the Financial Restructure cannot be sufficiently progressed within the grace period, there is a risk that other noteholders could take enforcement action following the 30-day grace period – which would require at least 25% of noteholders to initiate such proceedings – and could result in the Company entering into insolvency proceedings.
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