ANNUAL REPORT 2008 - KNM Steel Sdn Bhd

NOTES TO THE
FINANCIAL STATEMENTS (CONT’D)
15. Loans and borrowings (cont’d)
15.6 During the financial year, the Group obtained a bridging loan amounting to EUR350,000,000
(RM1,779,400,000) from a licensed bank to finance the acquisition of Borsig Group of Companies. The
outstanding amount as at the end of financial year is EUR150,000,000 (equivalent to RM737,400,000).
The bridging loan bears interest ranging from 6.25% to 7.75% during the financial year.
Subsequent to year end, the licensed bank has approved and the Group has successfully converted the
EUR150,000,000 bridging loan into a 3-year Ringgit Term Loan facility of RM702,660,000 in February
2009.
The 3-Year term loan facility has the following significant covenants:
(i)
(ii)
The Group debt to equity ratio shall not be more than 1.75 times at all times.
The finance service cover ratio of the Group shall not be less than 1.5 times at all times.
In addition, the term loan facility is secured by way of a pledge of the Group’s shares in a foreign subsidiary,
including assignment over all dividend payments arising there from.
The secured term loan is repayable on an agreed half yearly installment commencing from 2009.
15.7 Finance lease liabilities
Finance lease liabilities are payable as follows:
2008 2007
Minimum
Minimum
lease
lease
payments Interest Principal payments Interest Principal
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Less than one year 1,530 551 979 – – –
Between one and
five years 5,640 1,958 3,682 – – –
More than five years 7,755 677 7,078 – – –
14,925 3,186 11,739 – – –
The finance lease liabilities are subject to interest ranging from 4.5% to 15% per annum.
16. Long term payables
Group
2008 2007
RM’000 RM’000
Social security institutions 23,608 33,345
Other long term payables 7,064 –
30,672 33,345
Amounts payable to social security institutions of foreign subsidiaries are unsecured, subject to interest of 4%
(2007 - 2.5% to 8.0%) with no fixed terms of repayment.
KNM GROUP BERHAD
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ANNUAL REPORT 2008