Yoma Strategic Holdings Ltd Z59 , on March 14, announced that the shareholders of Meeyahta Development Limited (MDL) and MDL’s lenders have agreed to restructure the debt facilities for the Yoma Central project.
The shareholders of MDL, the developer of the Yoma Central project, are Yoma Strategic Investments, MMJ Yangon Development (MMJYD), First Myanmar Investment Public Company Limited, International Finance Corporation (IFC), and Asian Development Bank (ADB).
Yoma Strategic Investments is a wholly-owned subsidiary of Yoma Strategic Holdings. IFC and ADB are MDL’s lenders.
The restructuring comes as construction of Yoma Central was temporarily suspended in mid-2021 due to the uncertain economic environment. Since the suspension, MDL’s shareholders and lenders have talked about restructuring the project’s debt facilities.
To put the restructuring in place, several amendment agreements, including a standstill letter and a release agreement, were signed on March 2.
Under the agreements, the lenders will grant a standstill period till June 25, 2025, where they will not take any action in respect of any event of default that may arise under the loan.
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MMJYD has also agreed to contribute additional shareholder loans to MDL, which will partly be used to repay and prepay the instalments of the principal loan amount due from June 15, 2021 till Dec 15, 2024. The remaining funds from this funding will be used towards the payment of other amounts due under the loan.
The MMJYD funding was completed on March 13.
According to Yoma Strategic, the group believes that the restructuring and standstill offers several benefits, including allowing MDL to focus on reviewing the current development plan for the project and determine if any adjustments to the plan would be a more feasible approach in the current economic environment.
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The restructuring, which will repay some US$54 million of the loan, also allows the group to reduce its consolidated total borrowings, which is around US$284 million as at Sept 30, 2022.
MDL is expected to restart the project shortly with a view to reducing the project’s overall development cost accordingly.
Shares in Yoma Strategic closed at 9.9 cents on March 13.
