Pursuant to condition 23 of the Terms and Conditions of the Domestic Medium Term Note Programme dated 3 May 2012, referred to in the Applicable Pricing Supplements, our auditors have performed the required procedures and have reported the factual findings on the financial covenants as at and for the abovementioned period as follows:
- The cover ratio has not been met and is not at least 4 times;
- The residual asset ratio is at least 1.85 times; and
- The net debt equity ratio does not exceed 50%.
As with prior periods, this report for the period ended 31 August 2017 is available to holders of the notes referred to above from the company secretary, on request.
The cover ratio is less than the minimum ratio stipulated in condition 23. As highlighted in our announcement on 30 November 2017:
- the group entered into negotiations with the group’s lead bankers (where the banking facilities contain a similar covenant) and certain noteholders, each of whom agreed to receive non-public information from CIG, to request a covenant waiver effective 31 August 2017; the lenders and the relevant noteholders (representing a majority of the total notes outstanding relative to notes in issue) have agreed not to exercise any rights in relation to the cover ratio not being met and have provided assurance that all current facilities will remain in place until 15 February 2018; and
- the lenders and relevant noteholders agreed to establish a funders’ committee to review and assess the process going forward.
CIG proposes to call a noteholders meeting to take place during the second half of February 2018, where noteholders will be requested to vote on a number of motions proposed by CIG or the noteholders. Due notice of the date of such meeting and an agenda for the meeting will be provided to all noteholders in accordance with the terms of the notes. Should a noteholder wish to receive the same non-public information that has been made available to the funders committee (subject to compliance with the restrictions imposed by the Financial Markets Act, 2012) and join the funders committee to engage with CIG through this process, please notify CIG accordingly by not later than 12 January 2018. Note that the funders committee was established in order for funders to receive information updates from CIG (which may be non-public in nature) and to act as a discussion platform amongst its members and CIG. It cannot make any (collective) decisions and therefore cannot bind any of the funders whether such funders have decided to join the funding committee or not.
The management team remains committed to a transparent process and undertakes to work with their funders to mitigate risks identified pursuant to an independent business review process.