SQ Faces Call Default on Bonds Worth $21.5 Million Amid Debt Restructuring Efforts

Sahakol Equipment Public Company Limited (SQ) has announced a call default on two of its bond series, SQ256A and SQ266A, totaling approximately 785 million baht (around $21.5 million). This situation arose after the company failed to meet its obligations for both principal and interest payments, as reported to the Stock Exchange of Thailand and the Securities and Exchange Commission.

The default was triggered by the outcome of a bondholders' meeting held on May 26, 2023, where proposals for debt restructuring were not approved. Consequently, SQ could not rectify the defaults within the stipulated timeframe, leading to the bondholders exercising their rights to declare the bonds due immediately.

For the SQ256A series, the bondholders, represented by Krungsri Bank, issued a notice on May 27, 2023, demanding payment of 531,711,746.58 baht (approximately $14.8 million) by June 26, 2023. This series has an outstanding value of 522,500,000 baht (around $14.6 million) and includes 142 bondholders. Meanwhile, for the SQ266A series, Asia Plus Securities, representing the bondholders, issued a notice on May 28, 2023, requiring SQ to pay back 254 million baht (about $7.1 million) plus any overdue interest within 30 days of receiving the notice.

“We are confident that we can continue our projects and generate revenue to repay our bondholders as planned.”Sahakol Equipment Public Company Limited

As of now, SQ has indicated that it is unable to fulfill these payment obligations. However, the company is actively negotiating with five financial institutions, including Siam Commercial Bank and Bangkok Bank, for a potential debt restructuring plan. Reports suggest that these institutions are considering the company's requests favorably, which may include postponing principal repayments and reducing interest rates.

Despite the current challenges, SQ remains optimistic about its ability to continue operations and generate revenue to meet its debt obligations. The company has assured that the default on these two bond series will not affect its obligations to other bondholders of different series, who have already agreed to a debt restructuring plan.

Moving forward, SQ plans to evaluate its management strategies regarding the SQ256A and SQ266A bond series and will disclose any developments through the Stock Exchange of Thailand's information system.