DP AIRCRAFT I LIMITED DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
DP Aircraft I Limited (the 'Company') was incorporated with limited liability in Guernsey under The Companies
(Guernsey) Law, 2008 as amended, on 5 July 2013 with registered number 56941.
The Company was established to invest in aircraft. The Company is a holding company, and makes its investment in aircraft through four wholly owned subsidiary entities, DP Aircraft Guernsey I Limited, DP Aircraft Guernsey II Limited, DP Aircraft Guernsey III Limited and DP Aircraft Guernsey IV Limited (collectively and hereinafter, the
'Borrowers'), each being a Guernsey Incorporated company limited by shares, and two intermediate lessors, an Irish incorporated private limited company and a UK incorporated private company (together the 'Lessors'). The Company and its subsidiaries (the Borrowers and the Lessors) comprise the Group.
Pursuant to the Company's Prospectus dated 27 September 2013, the Company offered 113,000,000 Ordinary Preference Shares (the 'Shares') of no par value in the capital of the Company at an issue price of US$1.00 per Share by means of a Placing. The Company's Shares were admitted to trading on the Official List of the Channel Islands Stock Exchange and to trading on the Specialist Fund Market of the London Stock Exchange on 4 October
2013. As the ISA Regulations were amended last year so that shares traded on the Specialist Fund Market are now eligible in their own right for inclusion in an ISA, on 27 May 2015, the Company delisted its Shares from the Official List of the Channel Islands Stock Exchange.
On 5 June 2015, the Company offered 96,333,333 Ordinary Preference Shares (the 'New Shares') of no par value in the capital of the Company at an issue price of US105.89 cents per Share by means of a Placing. The Company's New Shares were admitted to trading on the Specialist Fund Market of the London Stock Exchange on 12 June
2015.
In total there are 209,333,333 Ordinary Preference Shares in issue with voting rights.
The Company's investment objective is to obtain income and capital returns for its Shareholders by acquiring, leasing and then, when the Board considers it appropriate, selling aircraft (the 'Asset' or 'Assets').
To pursue its investment objective, the Company uses the net proceeds of placings and other equity capital raisings, together with loans and borrowings facilities, to acquire aircraft which will be leased to one or more international airlines.
The Board comprises three independent non-executive directors. The Directors of the Board are responsible for managing the business affairs of the Company in accordance with the Articles of Incorporation and have overall responsibility for the Company's activities, including portfolio and risk management, while the asset management of the Group is undertaken by DS Aviation GmBH & Co. KG (the 'Asset Manager').
The Asset Manager has undertaken to provide the asset management services to the Company under the terms of an asset management agreement but does not undertake any regulated activities for the purpose of the UK Financial Services and Markets Act 2000.
The Company aims to provide Shareholders with an attractive total return comprising income, from distributions through the period of the Company's ownership of the Assets, and capital, upon any sale of the Assets. The Company targets a quarterly distribution in February, May, August and November of each year. The target distribution is 2.25 cents per Share per quarter. This is a target level of dividends only and should not be treated as an assurance or guarantee of performance or a profit forecast.
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
Fact Sheet
Highlights
Chairman's Statement
Asset Manager's Report
Directors
Statement of Principal Risk & Uncertainties
Statement of Directors' Responsibilities & Going Concern
Independent Review Report to DP Aircraft I Limited
Unaudited Condensed Consolidated Interim Financial Statements
Company Information
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
Ticker DPA
Company Number 56941
ISIN Number GG00BBP6HP33
SEDOL Number BBP6HP3
Traded SFM
SFM Admission Date 4 October 2013
Share Price 105.0 cents as at 20 August 2015
106.0 cents as at 30 June 2015
Country of Incorporation Guernsey
Current Shares in Issue 209,333,333
Administrator and Company Secretary Dexion Capital (Guernsey) Limited Asset Manager DS Aviation GmbH & Co. KG Auditor and Reporting Accountant KPMG, Chartered Accountants Corporate Broker Canaccord Genuity Limited
Aircraft Registration EI-LNA EI-LNB
HS-TCC HS-TQD
Aircraft Serial Numbers 35304
35305
36110
35320
Aircraft Type and Model B787-8
Lessees Norwegian Air Shuttle ASA
Thai Airways International Public Company Limited
Website www.dpaircraft.com
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
Profit Before Tax of 4.26 cents per Share for the interim accounting period from 1 January 2015 to 30 June 2015 (4.367 cents per Share 1 January 2014 to 30 June 2014).
No tax arises on the profit of the Company as it is Guernsey resident where the standard rate of income tax for companies is nil. Therefore the Profit Before and After tax in the period of US$5,226,004 (2014: US$4,934,920) is the same.
The NAV (post the interim dividends) was 100.71 cents per Share as at 30 June 2015 (95.262 cents per Share as at
30 June 2014).
Although the fair values of the derivatives and associated debt liabilities will move over their terms, at maturity the derivatives will reduce to nil and the fair value of the associated debt liabilities will equate to their amortised cost.
As at 30 June 2015 | As at 31 December 2014 | |
NAV including swap liabilities | US Cents per Share 0.98466 | US Cents per Share 0.93575 |
NAV excluding swap liabilities | 1.00713 | 0.98151 |
Dividends were declared on:
20 January 2015 for the period ended 31 December 2014 of 2.25 cents per Share, paid 13 February 2015;
20 April 2015 for the period ended 31 March 2015 of 2.25 cents per Share, paid 18 May 2015; and
17 July 2015 for the period ended 30 June 2015 of 2.25 cents per Share, paid on 14 August 2015.
The Company's Shares were first admitted to trading on the Official List of the Channel Islands Stock Exchange and to trading on the Specialist Fund Market of the London Stock Exchange on 4 October 2013. The Company's Shares were delisted from the Official List of the Channel Islands Stock Exchange on 27 May 2015.
On 12 June 2015, 96,333,333 Shares were issued at a price of 105.89 cents per Share pursuant to a Placing Agreement, dated 5 June 2015, between the Company, DS Aviation, JS Holding (DS Aviation and JS Holding together the 'Asset Manager Parties') and Canaccord Genuity (the Company's Corporate Broker) whereby Canaccord Genuity acted as agent for the Company, to procure subscribers for Shares under the Placing of shares at the Issue Price (the 'Placing'). The Placing raised gross proceeds of US$102.0m.
Two additional aircraft were purchased on 18 June 2015 with the equity from the Placing and from new borrowings. Due to the timing of the purchases, the impact on net profit was minimal as at and for the period ended 30 June 201
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
I am pleased to present Shareholders with the interim report of the Company for the six month period to 30 June
2015.
There were two major corporate actions during the period to 30 June 2015.
Prospectus
On 5 June 2015 the Company published a new Prospectus in connection with the placing of 96,333,333 new ordinary preference shares of no par value at 105.89 cents per share. The Placing was issued to raise gross proceeds of US$102m, the net proceeds of which were used by the Company to finance the acquisition of two additional Boeing 787-8 aircraft. The Placing was issued in full and announced to the market on 10 June 2015, with the new shares admitted to trading on the Specialist Fund Market on 12 June 2015.
Additional Aircraft
The two additional assets were purchased in June from AerCap Ireland Capital Limited with attached leases to
Thai Airways International Public Company Limited.
This was a welcome opportunity and I wish to express my thanks to the Asset Manager and to the Board for their commitment and dedication in the execution of the transactions.
The total shareholder return for the period was 4.26 cents compared to 4.367 cents for the same period last year and the continued performance of the Lessors enabled the Company to meet its quarterly dividend targets as described in the Highlights section.
Outlook
As explained by the Asset Manager in its report, starting on page 7, the International Air Transport Association (IATA) has raised its projections for global net profits in 2015 from USD 25.0 billion to USD 29.3 billion; expects air travel to grow by 6.7 per cent; forecasts that 1 per cent. of global GDP will be spent on air transport over the year, representing an amount in excess of USD 760 billion; and believes that both total employment and productivity will rise by more than 3 per cent.
This news bodes well for the remainder of the year.
Your board of directors is available via the Company Secretary, whose details can be found at the end of this report.
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
The positive outlook for the airline industry has strengthened as the year has gone on. The International Air
Transport Association (IATA) has raised its projections for global net profits in 2015 from USD 25.0 billion to USD
29.3 billion; expects air travel to grow by 6.7 per cent.; forecasts that 1 per cent. of global GDP will be spent on air transport over the year, representing an amount in excess of USD 760 billion; and believes that both total employment and productivity will rise by more than 3 per cent.
European airlines have had to deal with high levels of competition and significant regulatory costs. Nevertheless, the region has achieved the second highest load factors and is generating solid growth. IATA expects net profits for European airlines to grow to USD 5.8 billion in 2015. In May 2015, international air travel for European carriers increased by 5.9 per cent compared to the same month in the previous year.
Air traffic in the Asia-Pacific region is forecast to grow by 8.1 per cent in 2015 and net profit to increase to USD 5.1 billion. With Revenue Passenger Kilometres (RPK) in the first five months of 2015 growing by 8.6 per cent. on the same period last year, and Available Seat Kilometres (ASK) increasing by only 6.7 per cent. over the equivalent period, this had a positive impact on load factors. According to Airbus (Global Market Forecast 2015-2034), the Asia-Pacific region will continue to take the lead in world traffic over the next 20 years. Currently, this region has a
29 per cent. share of world traffic measured in RPK.
Lower crude oil prices have had a positive impact on the aviation business, but this has been offset to a large extent by the strength of the US Dollar. However, airlines remain prudent, and IATA´s air passenger market analysis of May 2015 shows that airlines have been adding capacity at a slower rate than the expansion in demand, leading to improved load factors. In any event, given the uncertainty as to future oil prices, aircraft benefitting from the latest technology, such as the Dreamliner Boeing B787, will stay in strong demand.
The long-term outlook remains positive for both the aviation market and the levels of demand for new aircraft. According to their latest published market outlooks, both Boeing (Current Market Outlook 2015-2034) and Airbus remain of the opinion that passenger fleets will double by 2034. Airbus estimates that the current aircraft fleet of around 19,000 will grow to 38,500 aircraft in 2034 and that wide-body aircraft will represent 55 per cent. of value. According to IATA, around 1,700 aircraft valued at USD 180 billion will be delivered to commercially operating airlines in 2015 to replace older aircraft and to further the growth of the global fleet. Boeing forecasts that 54 per cent. of twin aisle aircraft deliveries over the next twenty years will be within the 200-300 seat category. On top of that, Boeing estimates annual growth rates of airline traffic (RPK) at 4.9 per cent. on average over the next 20 years. The manufacturer made its forecast based upon the assumption of an average annual increase of 3.1 per cent. in global GDP over the same period.
IATA has calculated that the aviation sector provides 58 million jobs as well as USD 2.4 trillion in GDP. In 2015, it is anticipated that 3.5 billion passengers and nearly 55 million tonnes of cargo will be transported by air - over half of all international tourists and a third of world trade travels in this way. All these numbers emphasise the importance of the aviation and airline market in connecting people and supporting global trade and economic growth.
The Assets - Four Dreamliner Boeing 787-8s
As at 5 June 2015, a total of 1,105 Dreamliner B787s had been ordered from 60 customers, and 283 aircraft of these had been delivered to 31 operators. 50 Dreamliners were ordered in the first half of 2015 and, with a current backlog of around 800 aircraft orders and production fully sold out until 2019, it is clear that the aircraft remains in high demand. The Dreamliner Boeing 787 still ranks alongside the Airbus A350 (which entered into commercial service on 15 January 2015) as the latest technological, mid-size wide-body aircraft available in the market.
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
The advantages of the Boeing 787 are numerous. Alongside lower operational costs and a better environmental performance, the aircraft has interchangeable engines and shares a common pilot type rating with Boeing 777 aircraft. Furthermore the Boeing 787, especially the B787-8, is a suitable aircraft for point-to-point routes and a market opener. Worldwide, there are over 55 new non-stop markets connected with the B787.
Since DP Aircraft I Limited took title of both LNA and LNB in 2013, Norwegian has met all of its lease obligations in full. The same applies to Thai Airways where title transfer of TQC and TQD took place this June. Both carriers operate their aircraft in a two-class configuration. Norwegian´s cabins provide 32 premium economy plus 259 economy seats, while Thai Airways´ cabins offer seating for 24 business ('Royal Silk Class') and 240 economy passengers. Whereas Norwegian uses its B787 aircraft to serve Bangkok and destinations in the U.S., Thai Airways currently deploys its B787s on routes within the Asia-Pacific region as well as to and from destinations in Australia.
The Lessees
Norwegian Air Shuttle ASA
Norwegian Air Shuttle is the first low-cost carrier offering non-stop flights from Scandinavia to the U.S. In 2014, the airline transported nearly 24 million passengers. As at 30thJune 2015, the carrier operated 434 scheduled routes to 130 destinations in 39 countries. This includes 18 non-stop long-haul routes between Europe and the U.S., as well as Thailand. In autumn 2015, Norwegian will add three new long-haul destinations from the UK and Scandinavia, operating flights to Puerto Rico, St. Croix (in the US Virgin Islands) and Las Vegas. In May 2016,
Norwegian will open a new route between London-Gatwick and Boston. The total fleet comprises 100 aircraft at the end of the second quarter 2015. The carrier was awarded 'Europe´s Best Low Cost Airline' and 'World´s Best Low Cost, Long Haul Airline' by Skytrax in 2015.
In the second quarter of 2015, ASKs and RPKs increased by 8 per cent. and 15 per cent. respectively compared to the same period in the preceding year. The load factor increased by 5 percentage points to 85 per cent. and operating revenues increased by 16 per cent. EBITDAR (excluding other gains and losses) improved by 122 per cent. The operating profit for the first quarter was NOK 520.5 million (USD 66.1 million) compared to an operating loss of NOK 85.1 million (USD 13.9 million) over the equivalent period, while net profit increased by 153 per cent. Ancillary revenues per scheduled passenger increased in the same period by 14 per cent. At 30 June 2015, cash and cash equivalents amounted to NOK 3,045.4 million (USD 386.9 million). In June 2015, Norwegian Air Shuttle transported 7 per cent. more passengers than in the same month in the previous year. Furthermore the unit revenue (Revenue per ASK) increased by 6 per cent.
Norwegian's Q2 2015 results have been affected by the weak Norwegian currency but this has been outweighed by the lower fuel price. The load factor of long-haul operations was 91 per cent. and passenger numbers have more than doubled compared to the equivalent period last year. Norwegian´s strongest passenger growth was at London Gatwick. Since starting long-haul operations two years ago with two B787 aircraft, the carrier has transported 1.7 million passengers on routes to and from Bangkok and the United States. In April 2015, Norwegian took delivery of its eighth B787-8. The carrier will receive another four Dreamliners in 2016, three in
2017 and a further two B787s in 2018 so that it will operate a fleet of 17 Boeing Dreamliner 787s by the end of
2018. Last but not least, Norwegian is targeting growth of 30 per cent. in ASKs on its long-haul routes by the end
of this year and expects positive contribution from long-haul operations going forward.
Thai Airways International
Thai Airways International Public Company Limited is a global full-service carrier with 55 years of experience, and is one of the founding members of the Star Alliance airline alliance. As at 31 March 2015, Thai Airways (including its subsidiary Thai Smile) had an active fleet of 93 aircraft. The fleet consists of 20 narrow-body aircraft and 73 wide-body aircraft, of which 4 aircraft are Boeing 787-8s. The carrier transported more than 19 million passengers
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
in 2014. The airline serves over 70 international and domestic destinations across four continents. The flag carrier of the Kingdom of Thailand is market-listed and majority-owned by the Thai Government (51.03 per cent). Thai Airways is a member of IATA as well as IOSA certified (IATA Operational Safety Audit - the benchmark for global safety management in airlines). Moreover, Thai Airways is rated a four star airline by Skytrax.
Thai´s network as at 28thMarch 2015 served 66 international destinations in 34 countries and 7 cities within Thailand. Its subsidiary Thai Smile served 10 regional routes. As a result of its dense network within Thailand and South-East Asia as well as a result of its rewarded service, Thai Airways attracts a high percentage of holiday travellers. Moreover, owing to its aforementioned excellent service and customer-orientation the airline is also attracting the higher yield traveller segment of international, less price-sensitive, business customers. In 2015, Thai Airways was placed first in 'World's Best Airline Lounges Spa Facility' by the Skytrax World Awards.
The results for the first quarter of 2015 show that ASKs increased by 4.5 per cent. whereas RPKs grew by 12.3 per cent and consequently the load factor increased by 5.3 percentage points compared to the equivalent quarter in the previous year. Operating revenues increased by 3.4 per cent. while operating expenses decreased by 11.71 per cent. EBIT was THB 5,825 million (USD 171.6 million) and net profit augmented to THB 4,541 million (USD
133.8 million). However, the net profit was influenced by gains on foreign exchange as well as by an impairment charge because of the phase out of 12 aircraft. In May 2015 compared to the same month in the previous year, the number of carried passengers increased by 13.4 per cent. and cabin load factor grew by more than 6 percentage points. ASKs remained stable and RSKs increased by 11 per cent. in this period.
The airline's recently implemented restructuring plan is intended to improve both profitability and cost-efficiency as well as customer-orientation. Thai Airways has started to offer Wi-Fi-connectivity on board selected aircraft and has increased the free baggage allowance. Further initiatives which have already been implemented include the reduction of the fleet and its complexity, as well as the adjustment of the network and the discontinuation of unprofitable routes. Currently the carrier operates a fleet of five B787-8s which form part of the move towards fleet restructuring and modernisation. Thai Airways plans to increase its Dreamliner fleet to eight aircraft in 2017.
DS Aviation GmbH & Co. KG Member of Dr. Peters Group Stockholmer Allee 53
44269 Dortmund, Germany
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
The current Directors of the Company were appointed on 9 July 2013 and are as follows:
Jonathan (Jon) Bridel, Non- Executive Chairman (50)
Jon is a Guernsey resident and is currently a non-Executive Director of Alcentra European Floating Rate Income
Fund Limited, Starwood European Real Estate Finance Limited, The Renewables Infrastructure Group Limited and Sequoia Economic Infrastructure Income Fund Limited, which are all listed on the Main Market of the London Stock Exchange. Other companies of which he is a director include Aurora Russia Limited and Fair Oaks Income Fund Limited. Jon was previously Managing Director of Royal Bank of Canada's investment businesses in the Channel Islands and served as a Director on other RBC companies including RBC Regent Fund Managers Limited. Prior to joining RBC, Jon served in a number of senior management positions in banking, specialising in credit and corporate finance and private businesses as Chief Financial Officer in London, Australia and Guernsey, having previously worked at Price Waterhouse Corporate Finance in London.
Jon graduated from the University of Durham with a degree of Master of Business Administration, and holds qualifications from the Institute of Chartered Accountants in England and Wales (1987) where he is a Fellow, the Chartered Institute of Marketing and the Australian Institute of Company Directors. Jon is a Chartered Marketer and a member of the Chartered Institute of Marketing and the Institute of Directors and a Chartered Fellow of the Chartered Institute for Securities and Investment.
Didier Benaroya, Non- Executive Director (64)
Having previously worked as the founder and senior partner of the Transportation Group and the managing
director of Paine Webber, Didier has extensive experience in the transportation industry. He is currently resident in the UK and is the founder and a director of Numera Limited and Numera Services Limited, which has advised investors, lessors, banks, operating lease companies and airlines on aircraft and airline related transactions (including leasing, financing and restructuring) since 1995. Didier holds a BS in Economics, an MS in Mathematics and Applied Computer Science from the University of Paris, and an MBA from Northwestern University's Kellog School of Management.
Jeremy Thompson, Non- Executive Director (59)
Jeremy is a Guernsey resident with sector experience in finance, telecoms, aerospace & defence and oil & gas.
Since 2009 Jeremy has been a consultant to a number of businesses which includes non-executive directorships of investment vehicles relating to the BT pension scheme. He is also a non-executive director of private equity funds and of the Investment Manager of a London listed solar energy fund. Between 2005 and 2009 he was a director of multiple businesses within a private equity group. This entailed an active participation in private, listed and SPV companies. Prior to that he was chief executive officer of four autonomous businesses within Cable & Wireless PLC (operating in both regulated and unregulated markets), and earlier held MD roles within the Dowty Group. Jeremy currently serves as chairman of the States of Guernsey Renewable Energy Team and is a commissioner within the Alderney Gambling Control Commission and is also a member of the Guernsey Tax Tribunal panel. Jeremy received a B.Sc. from Brunel University, London and was awarded an MBA from Cranfield University. He was an invited member to the UK's senior defence course (RCDS). Jeremy has been awarded the Institute of Directors' Certificate and Diploma in Company Direction and is a member of the Institute of Directors. He is currently studying for an M.Sc in Corporate Governance.
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DP AIRCRAFT I LIMITED
Unaudited Condensed Consolidated Interim Report for the period ended 30 June 2015
In preparing these unaudited condensed consolidated interim financial statements, the nature of the risks and uncertainties borne of the group were the same as those that applied to the consolidated financial statements as at, and for the period ended 31 December 2014.
Asset risk
The Company's Assets comprise four Boeing 787-8 aircraft. The Boeing 787-8 remains a relatively newly developed generation of aircraft; there is currently insufficient experience and data available to be able to give a complete assessment of the long-term use and operation of the aircraft; the Company is exposed to the used aircraft market of the 787-8, which is untested.
Market risk
The airline industry is particularly sensitive to changes in economic conditions and is highly competitive; risks
affecting the airline industry generally could affect the ability of Norwegian and/or Thai Airways (or any other lessee) to comply with their obligations under the Leases (or any subsequent lease).
There is no guarantee that, upon expiry of the Leases, the Assets could be sold for an amount that will enable Shareholders to realise a capital profit on their investment or to avoid a loss. Costs regarding any future re- leasing of the assets would depend upon various economic factors and would be determinable only upon an individual re-leasing event.
Key personnel risk
The ability of the Company to achieve its investment objective is significantly dependent upon the expertise of
certain key personnel at DS Aviation; there is no guarantee that such personnel will be available to provide services to the Company for the scheduled term of the Leases or following the termination of any of the Leases. However, Key Man clauses within the Asset Management agreement do provide a base line level of protection against this risk.
Credit risk & Counterparty Risk
Norwegian Air Shuttle ASA's ('Norwegian') stated strategy of providing low-cost long haul flights is untested and may not be successful; failure of this strategy, or of any other material part of Norwegian's business, may adversely affect Norwegian's ability to comply with its obligations under the Leases. Any failure by Norwegian to pay any amounts when due would have an adverse effect on the Group's ability to comply with its obligations under loan agreements, could ultimately have an impact on the Company's ability to pay dividends and could result in the Lenders enforcing their security and selling the relevant Asset or Assets on the market potentially negatively impacting the returns to investors. In mitigation, Norwegian is the second largest airline in Scandinavia and the third largest low-cost airline in Europe. Thai Airways International Public Company Limited ('Thai Airways') is an international full-service flag carrier. There is no guarantee that the business model of Thai Airways will be successful. Failure of any material part of the business model of Thai Airways may have an adverse impact on its ability to comply with the new leases. Thai Airways was founded in 1960 and is the national carrier of the Kingdom of Thailand. The Company's paid up capital amounted to approximately US$663.53m. as at 31 December 2014. The majority shareholding is owned by the Ministry of Finance and the Thai Government Savings Bank. Thai Airways is also listed on the stock exchange of Thailand.
Liquidity risk
In order to finance the purchase of the Assets, the Group has entered into four separate Loan Agreements pursuant to which the Group has borrowed an amount of US$159,600,000 from Norddeutsche Landesbank Girozentrale ('Nordbank') and US$157,000,000 from DekaBank Deutsche Girozentrale ('DekaBank'). Pursuant to the Loan Agreements, the Lenders are given first ranking security over the Assets. Under the provisions of each of the Loan Agreements, the Borrowers are required to comply with loan covenants and undertakings. A failure to comply with such covenants or undertakings may result in the relevant Lenders recalling the relevant Loan. In such circumstances, the Group may be required to sell the relevant Asset to repay the outstanding relevant Loan.
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