Rykadan Capital (02288) announced that it must satisfy several financial covenants according to several bank financing contracts between the group and lending banks. Based on the comprehensive financial statements of the group for the year ended March 31, 2024, the group failed to satisfy one financial covenant, which is the net asset requirement stipulated for several bank borrowings. The failure to meet this financial covenant constitutes a default event under the bank borrowing, which will empower the relevant banks to declare all outstanding principal, accrued interest, and all other payable amounts under the bank borrowing to be immediately due and payable. As of the date of this announcement, the total amount of outstanding principal under the bank borrowing is HKD 185 million.
Rykadan Capital (02288) announced that it must satisfy several financial covenants according to several bank financing contracts between the group and lending banks. Based on the comprehensive financial statements of the group for the year ended March 31, 2024, the group failed to satisfy one financial covenant, which is the net asset requirement stipulated for several bank borrowings. The failure to meet this financial covenant constitutes a default event under the bank borrowing, which will empower the relevant banks to declare all outstanding principal, accrued interest, and all other payable amounts under the bank borrowing to be immediately due and payable. As of the date of this announcement, the total amount of outstanding principal under the bank borrowing is HKD 185 million.
The directors of the company are currently discussing the required waivers with the relevant banks and are renegotiating the terms of the bank financing. As of the date of this announcement, the negotiation is still ongoing, and the group has not obtained any required waivers from the relevant banks. The company has not been required to immediately repay the bank loans under the bank financing. The directors of the company are confident that they will obtain the required waivers or that the relevant banks and the group will be able to reach a mutually acceptable revised terms for the bank financing. In any event, if the relevant banks require the immediate repayment of the bank loans, the directors of the company believe that there are sufficient alternative sources of funds to ensure the continued operation of the group without any threats. Despite the failure to meet this financial covenant, the group has not encountered any difficulties in obtaining financing from its banks for its operating funds.
The company's directors are confident that they will obtain the necessary exemptions or that the relevant banks and groups will be able to reach a revised banking financing agreement that is acceptable to both parties. In any case, if the relevant bank requires immediate repayment of the bank loan, the company's directors believe that there are sufficient alternative sources of funds to ensure the continued operation of the group is not threatened. Despite the failure to meet the financial commitment, the group has not encountered any difficulties in obtaining financing from its banks for its operating funds.