Habas HZ Investments Ltd. (TASE: HABS) subsidiary Habas Tulip BV has obtained a waiver letter from one of the Dutch banks financing the company granting a moratorium from March 25 through April 5, during which Habas will not have to increase the LtSV (the loan to market cap ratio of Nieuwe Steen Investments NV (NSI) (AEX:NISTI)) to over 55% from the 50% stipulated in the financial covenants. Habas owns 20.5% of Dutch REIT NSI through a 74% stake in Habas Star BV unit Habas Tulip.
Habas last increased its collateral to the banks which financed the acquisition of NSI on March 21.
The main threat facing Habas and its bondholders is the foreclosure of its NSI shares by Rabobank BA, which financed the acquisition of the stake. The bank is liable to foreclose the lien because of the plunge in NSI's share price, forcing Habas Star to strengthen its collateral.
Habas Star owes the banks €55 million. The original financial covenants stipulate that the loan, net of attached cash, will not exceed 50% of NSI's market cap. Habas Star has already had to increase the collateral by €2-3 million because of the fall in NSI's market cap, in order to meet the loan to value ratio. Last week, Habas partner in Habas Star, Mayer Cars and Trucks Ltd. extended Habas a €1.3 million 90-day loan at 12% annual interest. Under the terms of the loan, Mayer Cars and Trucks would receive additional payment if NSI's share price rises; it hasn’t, which would have forced Habas to provide additional collateral to the Dutch bank were it not for the waiver letter.
Published by Globes [online], Israel business news - www.globes-online.com - on March 27, 2013
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