Singapore: FSL Trust Management (FSLTM) is in discussions with its lenders over the 12-month relaxation on two loan covenants due to expire on 30 June 2013.
“In view of the uncertainties surrounding asset values and the challenging outlook of the shipping industry, FSLTM has commenced discussion with its lenders to resolve any potential breach of the original VTL and DSC ratio covenants after the relaxation period,” the Singapore company said.
Philip Clausius, ceo of FSLTM said: “Any breach of loan covenants gives lenders contractual enforcement rights. Our experience during this prolonged shipping crisis has been that borrowers who are able to meet their scheduled principal and interest payments will stand in good stead in their discussions with their lenders to avert or cure technical breaches.
“We are confident that the Trust’s existing vessel portfolio can continue to generate sufficient cash flows to service its scheduled quarterly principal and interest payments due to our lenders. In addition, we have also strengthened the Trust’s balance sheet by building up its cash reserves over the past year. We have strong relationships with our lenders and we remain in discussion with them to avoid any potential technical breach of these covenants after 30 June 2013. [01/03/13]