This article is from the Australian Property Journal archive
ELANOR Investors Group has recorded a covenant breach while its refinancing remains in progress, as it continues to focus on simplify its business – including a release of over $100 million in capital.
Elanor, which has $6 billion in assets, has had its shares been suspended from trading since August 23rd, and a month ago it announced the immediate retirements of founder, CEO and managing director Glenn Willis, and chief operating officer Paul Siviour.
In an ASX statement on Friday, it said it had accepted credit-approved terms from Keyview Financial Group for a new $125 million secured term debt facility to refinance the balance of the group’s existing secured debt facility and the group’s unsecured corporate notes, fund the acquisition of managed fund co-investments, and provide working capital for the group while it executes its stated divestment strategy.
It is aiming to close the new facility the end of this month.
“While the refinancing arrangements remain in progress, the group has notified both the lender under its existing secured debt facility and the noteholders that the group’s gearing ratio reached 45% (40% covenant as calculated under the conditions of the notes), resulting in a covenant breach and a potential event of default under the notes,” it said.
“The group is working towards remedying the potential event of default through the refinancing of its secured debt and the redemption of the notes, in full, within the 30-day period provided for under the terms of the notes and in any event by 31 October 2024.”
Completion of Elanor’s sale of its 12.6% interest in ECF via an off-market sale to the Lederer Group for approximately $23.9 million occurred last month, allowing Elanor to permanently reduce the amount outstanding under its senior secured debt facility by $15 million.
“Asset realisations across several of the group’s managed funds are expected to release over $100 million of Elanor’s balance sheet capital over the next 18 months. Net gearing for the group will be substantially reduced following execution of these initiatives,” it said.
“The orderly divestment of fund assets within the Elanor Hotel Accommodation Fund is progressing, which will reduce debt within the fund and also release capital back to investors in the fund, including the group.”
