Ausgroup extends slide by 3.4% after reporting breach of debt covenant

SINGAPORE (May 19): AusGroup shares are down by 3.4% on Thursday, extending the slide after announcing on Tuesday night it had breached a debt covenant with its noteholders. As at 3.41pm, shares of AusGroup are trading at 8.4 cents with 2.8 million shares changing hands. On Wednesday, the stock had fallen 10% to close at 8.7 cents.

In its aftermarket filing to the SGX two days ago, AusGroup said its consolidated total equity has fallen below A$160 million ($160 million). This has resulted in a breach of the financial covenant under the trust deed between the energy and resources specialist and DBS Trustee Limited to maintain its total equity at a minimum A$160 million at all times.

“The company intends to seek waivers from holders of the unsecured notes in relation to the breach and event of default,” said AusGroup in the media release. “There is no assurance that the waivers will be granted and, if granted, on terms and conditions that are acceptable to the Group.”

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