LIVING & Leisure Group has breathed a sigh of relief and is now confident its rescue package from James Packer will succeed despite the unsteadiness of Octaviar Group, the responsible entity of LLA.
For the past month, LLA’s recapitalisation strategy was teetering on the survival of Octaviar Limited, which is now fighting against the Public Trustees of Queensland in the Queensland Supreme Court to put the company in administration.
But since May 16 2008, LLA said the recapitalisation documentation and transactions have substantially progressed and it remains confident that the recapitalisation will proceed.
LLA has agreed lender, National Australia Bank, to continue to forbear LLA’s debt facilities until July 31 2008 provided that LLA lodges its offer document for the Rights Offer by no later than June 30 2008.
LLA is also working closely with the proposed incoming bank facility providers to ensure that the documentation for its new senior debt facilities are completed before the Rights Offer documentation is lodged. The proposed facilities include a $75 million senior secured facility with a working capital facility of an additional $10 million.
Meanwhile, LLA said an agreement has been reached on the final commercial terms for the replacement and reduction of the total debt owed by LLA to the Octaviar Premium Income Fund by various parties including Arctic Capital, James Packer’s private equity arm.
In addition, the acquisition from the Octaviar Group of Living and Leisure Australia Management Limited, the responsible entity of the Living and Leisure Australia Trust, by Arctic Capital is subject to standard conditions precedent and final commercial due diligence.
LLA’s independent chair Julanne Shearer said the group expects both acquisitions will be fully documented within the recapitalisation timetable.
“The Board has every confidence in the completion of the recapitalisation proposal given the realistic timetable now agreed with our senior secured lender together with the support of Arctic Capital.
“We acknowledge the difficult circumstances that LLA has found itself in,” she concluded.
LLA’s shares traded 1.2 cents or 31.58% higher yesterday to close at 5 cents.
Australian Property Journal
