SINGAPORE - In-flight caterer and ground handler Sats on Dec 1 reported that it, along with its units, has secured uncommitted bilateral facilities to help it deal with the cancellation of an older revolving credit facility.

These facilities will also help the group streamline its treasury, banking and financial management and continue to generate cost savings, the company said in an announcement on the bourse.

In Singapore dollar terms, these facilities add up to $204.5 million, based on current exchange rates.

Sats’ indirect wholly owned unit Worldwide Flight Services (WFS) Global was granted uncommitted bilateral facilities totalling €25 million (S$36.4 million) by ING Bank, subject to the terms and conditions of a master agreement of guarantees and letters of credit between the two parties. 

WFS Global has also been granted similar facilities by MUFG Bank amounting to €33 million, subject to the terms and conditions of a framework agreement for the issuance of guarantees entered into by the two parties, Sats said. 

WFS, an indirect wholly owned unit of Sats, has also been granted uncommitted bilateral facilities totalling US$30 million by the Bank of America, subject to the relevant terms and conditions set out in the uncommitted line of credit letter. 

Under the corporate guarantees that it has entered into with the three parties, Sats guarantees to pay and satisfy the relevant lender on demand the due and punctual payments of all sums of money, obligations or liability, as well as all costs, charges and expenses which the respective lender may incur in enforcing or seeking to obtain payment or performance of all or any part of the money, liabilities or obligations guaranteed by Sats.

The group also noted that it has secured uncommitted bilateral facilities from HSBC Singapore to the tune of $80 million, comprising working capital and guarantee or bond limits. 

It added that it also has existing uncommitted banking facilities of about $500 million obtained from various lenders in the past. 

Prior to Sats’ acquisition of WFS Group on April 3, the company’s indirect wholly owned unit Neptune Holdings maintained a revolving credit facility of €160 million for the working capital and standby letter of credit requirements for the WFS Group. 

In June, Sats completed a liability management exercise to redeem and refinance certain floating rate notes and senior secured notes of Neptune Holdings (then known as Promontoria Holding) in full. 

The revolving credit facility was, as a result, partially cancelled, Sats said. 

In order to cancel WFS Group’s revolving credit facility fully and remove the restrictive covenants, Sats noted that it has restructured the existing standby letter of credit lines to uncommitted bilateral facilities with certain of the lenders under the WFS Group facility.

Shares of Sats closed flat at $2.65 on Dec 1. THE BUSINESS TIMES