Case Study
Project LPG Monitoring Accountant
Ongoing- Type of Case :
- Creditor Support and Advisory
- Title :
- Monitoring Accountant for Gas Processing Company
- Status :
- Ongoing since December 2017
- Value :
- USD 91 million
PROJECT OVERVIEW
- The Company is a gas processing player with capacity of 140 MMCFD as well as providing gas compressing service to PJB’s 920 MW gas fired power plant. In December 2017, AJCapital successfully led the completion of restructuring of USD 91.25 million syndicated debts that consisted of conventional and syariah debt facilities.
- The new terms and conditions as agreed in the term sheets includes monthly monitoring of Company’s cash flows and calculation of cash waterfall for cash sweep purposes.
- The lenders and Company agreed to appoint AJCapital as the Monitoring Accountant to assist the implementation of the restructuring plan, monthly monitoring of Company’s cashflows and to ensure compliance of the cash waterfall mechanism.
PROJECT ISSUES
- The Company has failed in its previous debts restructuring, so banks are very cautious and would like to ensure control and monitoring are in place with highly rigid and complex cash waterfall mechanism introduced.
- As part of the debts restructuring plan with the banks, the Company also made separate agreements to repay its payable to key suppliers. With numerous demand payments from these key suppliers in the past, the banks would like to ensure these payments are made as agreed to prevent any legal actions from key suppliers.
- Some of the banks and key suppliers payments are tied to the CP Aramco prices that required monthly monitoring and calculation.
WHAT WE DID
- We created monthly cash monitoring framework that monitors cash collection and cash disbursements.
- We assist the banks’ appointed facility agent in the implementation of the cash waterfall mechanism, including but not limited to the calculation on (i) scheduled monthly interest & principle, (ii) allocation to reserve account for debt settlement, (iii) allocation and disbursement of accelerated payment, (iv) allocation for Company’s operational and maintenance requirement, and (v) allocation to contingency operational account, if any.
- Reconcile monthly banks accounts to ensure compliance with the agreed terms.
- Obtain supporting documents for Company’s cash disbursements.
- Ensure committed payments to key suppliers as per the agreed terms.
- Highlight any findings to the banks and facility agent.
PROJECT OUTCOME
- Circulated a Monthly Monitoring Accountant Report to the banks, facility agent and Company since December 2017.