Embattled Lippo Mall Indonesia Retail Trust (LMIRT) has been thrown a lifeline. On Dec 11, LMIRT’s manager announced that it has obtained a IDR2.5 trillion (the equivalent of $215.72 million) amortising term loan for six years, subject to certain conditions including a consent solicitation exercise.
The new loan will be used to finance the repurchase of the outstanding 7.25% senior notes due in 2024, and the 7.5% senior notes maturing in 2026; and the consent fee.
The drawdown of the IDR2.5 trillion facility is conditional upon obtaining requisite consents from the holders of the 2024 notes and the 2026 notes.
Here comes the bad news. LMIRT is offering to buy the 7.25% 2024 notes at 76.5 cents per dollar, and the 7.5% 2026 notes at 66.5 cents per dollar. The outstanding amounts for the 2024 and 2026 notes are US$231.8 million and US$190.6 million respectively. “The drawdown of the IDR2.5 trillion loan is conditional upon obtaining consents from the bondholders,” OCBC Credit Research notes.
Furthermore, post the consent, “the USD bondholders will be subordinated to the IDR2.5 trillion loan given the that this loan is secured by one of the largest assets of LMIRT. Meanwhile the other two of LMIRT’s largest assets were secured by another $200 million loan granted in October 2023,” OCBC Credit points out. As at Sept 30, LMIRT’s three largest malls are Lippo Mall Puri (valued at $345.44 million), Sun Plaza ($232.97 million) and Lippo Mall Kemang ($195.46 million).
The expiration time is at 4pm GMT on Dec 20 for both the 2024 and 2026 notes, and the consent settlement date is no later than Dec 22 unless changed by the issuer.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
Also on Dec 11, LMIRT's manager announced that it won't be paying distributions on its $120,000,000 Perpetual Securities issued on June 19, 2017. The dividend stopper applies.
