The sale in February by Viva Energy Group Limited of its 35.5% stake in Viva Energy REIT, prompted a 60 day review event by its lenders. The banks responses has demonstrated banks' preference to support the sector, but is also a reminder of how non-bank lenders may act.
The group initially received waivers from lenders representing 85% of Viva Energy REIT’s total debt facilities, and no fees were payable by Viva Energy REIT to secure the waivers.
The Group confirmed today that it has been in ongoing discussions with the final two lenders in relation to $120.0 million of debt facilities in relation to the review event, of which only $20m had been drawn.
One of the two remaining lenders, a non-bank lender, has requested repayment of its $20.0 million term loan which was to have matured in September 2028. The Facility was entered into in 2018 as one of two new "Institutional Term Loans" the group sourced from an Australian-based international fund manager and an Australian industry superannuation fund. The repayment of the loan is an indication that non bank lenders decisions can often by motivated by different factors and hence hold a higher risk to the balance sheet.
Viva Energy REIT intends to repay this loan from other available debt facilities within 30 days.
After considering Viva Energy REIT’s near-to-medium term liquidity requirements, terms have been agreed with the other remaining lender for a revised facility limit of $50.0 million (previously $100.0 million) and a revised maturity date of April 2021 (previously June 2022). This facility is currently undrawn and provided by a club of three banks under a single bilateral facility.
Following completion of these initiatives, Viva Energy REIT’s pro forma liquidity position (unrestricted cash and undrawn debt facilities) is $104.3 million, with a weighted average debt maturity as at 31 March 2020 of 3.2 years.
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