RUBICON Japan Trust told the market yesterday it is currently not in a position to meet a margin call with the National Australia Bank.
The Allco Finance Group managed trust was forced to go into damage control yesterday, after its shares fell 57.4% or 13.5 cents to close at 10 cents.
RJT said it is holding talks with the NAB because it expects a margin call would be triggered under its foreign exchange hedging contracts as a result of the recent appreciation of the Japanese yen against the Australian dollar.
“RJT is not currently in a position to meet this anticipated margin call in full and is in active discussions with NAB regarding a standstill agreement, under which NAB would forbear from exercising its right to make further margin calls under the foreign exchange hedging contracts
“If RJT is unable to reach agreement with NAB there is a risk that an event of default or potential event of default would be declared. If an event of default is declared, RJT’s debt could be accelerated and this may result in RJT being unable to pay its debts as they fall due and payable,” the trust said.
As well as negotiating with NAB, the trust said it is also in negotiations with another lender to put in place a funding package that will provide sufficient funds to refinance RJT’s short term debt and to enable RJT to progressively buy-down its foreign exchange contracts.
“No agreement has at this stage been reached,” the trust said.
Meanwhile, RJT’s sister trusts Rubicon America Trust and Rubicon Europe Trust recently won a reprieve from their lenders, Credit Suisse.
RAT and REU reached an agreement with Credit Suisse to pay down their debt through monthly instalments.
In both deals, Credit Suisse will hold back from making margin calls on both trusts.
Last week, REU frightened investors when it told them it was not in a position to make €9.9 million euro repayment due by March 18 – demanded by Credit Suisse.
But later that day, REU was able to arrange a €34.0 million euro ($A56.2 million) loan, CB16 La Defense Loan, secured against an office tower on Defense Esplanade in
Meanwhile, RJT’s bad news rippled through to REU and RAT, both closing 14.81% or 2 cents and 18.52% or 2.5 cents lower at 11.5 cents and 11 cents, respectively.
Australian Property Journal
