Real People Investments asks bondholders to join standstill agreement

By Caroline Salls

Pittsburgh, May 26 – South Africa’s Real People Investment Holdings Ltd. is asking holders of its senior unsecured callable bonds 2013/2018 to become parties to a debt standstill agreement, according to a notice released by bond trustee Nordic Trustee & Agency AB.

The trustee said Real People Group is experiencing financial difficulties, and its capital adequacy ratio is expected to be below the prescribed level.

As a result, the company believes that it is in the best interest of its creditors to carry out a consensual restructuring.

Real People has entered into a debt standstill agreement with roughly 70% of its other senior unsecured creditors and 100% of its subordinated debt creditors in order to facilitate a restructuring of its capital structure.

According to the release, no interest or capital repayments will be made to standstill creditors while the standstill period is ongoing. In addition, the standstill creditors have agreed not to take any enforcement action against Real People and its group during the standstill period, which expires on Aug. 31.

“The standstill agreement is a vital part of a successful restructuring process, and the issuer therefore requests that the bondholders become parties to the standstill agreement as additional standstill creditors,” the release said.

Since it is likely that a restructuring will require that further resolutions be passed by the bondholders at a later stage, the trustee said Real People is also asking that notice periods be shortened to enable the bondholders to be able to pass resolutions faster than current terms permit.

The company is also looking to decrease the majority of bondholders required for approval of the standstill agreement to more than 50% of the adjusted face value for which bondholders are voting from 80%.

Based in East London, South Africa, Real People provides financial services focusing on unsecured credit, affordable housing, assurance, educational products and cellular products for customers in South Africa, Uganda, Tanzania and Kenya.

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