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Update on CPV Power Plant Operator
CPV Power Plant No.1 Bond SPV (RF) Limited
(Incorporated in the Republic of South Africa)
(Registration number 2012/176922/06)
Instrument Code: CPV01 ISIN: ZAG000104894
(“CPV Power Plant No.1” or “the Issuer”)
Update on CPV Power Plant Operator
Further to Group Five being placed in business rescue, bondholders
are reminded that Group Five is the operator for the power plant
owned by CPV Power Plant No 1 (“CPV1”), to which CPV Power Plant
No 1 Bond SPV (the “Bond SPV”) lent the proceeds of its listed
bond. Group Five’s filing for business rescue has caused a
termination right to arise under the Operations Agreement between
CPV1 and Group Five. At each repayment date, CPV1 makes a
representation to the Bond SPV that no termination right has
arisen under the Operations Agreement. Consequently, if left
unaddressed, the representation will be factually false the next
time it is made, which is 30 June 2019. Such a false
representation will cause a default under the Facility Agreement
between the power plant and the Bond SPV, which will in turn
result in a cross default on the bond.
CPV1 and the Bond SPV are considering means to resolve the issue
prior to the next repayment date, such that the event of default
does not arise.
To remedy the breach CPV1 needs to ensure that the Operator is not
suffering an insolvency event at the time it makes the
representation. As such, one of the following events needs to have
occurred:
- The business rescue process of Group Five must have
successfully completed by the end of June; or
- The bondholders have consented and ratified the course of
action proposed by the Project Company, in accordance with
the Bond Offering Circular and the Facility Agreement.
Bondholders will be kept informed in this regard.
9 April 2019
Debt Sponsor
The Standard Bank of South Africa Limited
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