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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2017
41
22.
BORROWINGS
In 2014, the Group issued US$ 250 million of 9.5% senior guaranteed unsecured notes maturing in August 2019 (the
“Notes”). Interest on the Notes is paid semi-annually in arrears on 4 February and 4 August. The Notes are listed on
the Global Exchange Market of the Irish Stock Exchange. The Notes are callable in whole, or, in part, at the option of
the Group prior to maturity, subject to certain conditions being satisfied.
Movement in carrying value of the Notes measured at amortised cost:
2017
2016
US$ 000’s
US$ 000’s
Par value payable on maturity
250,000
250,000
Unamortised initial transaction fees
(3,443)
(5,140)
Non-current portion
246,557
244,860
Interest accrued and payable within 12 months
(included in trade and other payables)
9,896
9,896
Carrying value as at end of the year
256,453
254,756
As at 31 December 2017, the fair value of the Notes was US$ 216.3 million (2016: US$ 232.8 million).
23.
CONVERTIBLE LOANS
2017
2016
US$ 000’s
US$ 000’s
Non-current portion
-
117,198
Current portion
158,204
19,075
158,204
136,273
Movement in convertible loan
2017
2016
US$ 000’s
US$ 000’s
As at 1 January
136,273
119,400
Change in fair value*
32,255
27,211
Payment
(10,324)
(10,338)
As at 31 December
158,204
136,273
*Of this amount US$ 3.5 million (2016: US$ 2.4 million) has been capitalised to qualifying assets in the period, see note 13, resulting in a net charge
to the consolidated income statement of US$ 28.7 million (2016: US$ 24.8 million).
During 2012, the Group entered into unsecured financing arrangements with Abraaj Capital and Qatar First Bank for
US$ 150 million each (total value of US$ 300 million). Under the arrangements, the Group has drawn down an amount
of US$ 100 million. There is no remaining availability to draw down additional amounts.
If the Group undertakes a public offering of shares raising at least US$ 150 million of equity, there is mandatory
conversion; if no such public offering has occurred by the 36 month following the first draw down of each convertible
loan, a period which elapsed in 2015 and 2016, the Company has the option for early repayment together with a
prepayment premium.
During 2017, the Group and KEC SPV 1 (an entity managed and controlled by Abraaj Investment Management Limited)
holding 50% of the convertible loans principal amended certain terms of the convertible loan agreement to defer the
first repayment date to mid-2018. The loans are repayable in three instalments within six months starting from first
repayment date. The lender have option to request conversion of loan into ordinary shares of the Company prior to
the first repayment date in certain circumstances as set out in the loan agreement. Subsequent to 31 December 2017
(see note 34), the Group has received an irrevocable notice of conversion from Qatar First Bank holding other 50% of
the convertible loan principal, to convert the principal and part of the premium amount outstanding into ordinary
shares of the Company under terms of the convertible Murabaha.