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KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2014
49
24.
LONG-TERM LOANS (CONTINUED)
6 months ended 30 June 2014:
The reserve based facility of USD 165 million is secured by pledges on the assets of the subsidiary Kuwait Energy
Egypt Ltd. Loan is repayable on 30 June 2017 and is measured at amortised cost using the effective interest method.
As at 30 June 2014, the Group has undrawn loan facilities amounting to USD 61.1 million although the amount
available for immediate draw down is limited to USD 1.2 million based on the latest borrowing base approved by
Deutsche Bank as determined by the forecast cash flows arising from the borrowing base assets. Subsequent to the
period ended 30 June 2014, the Group has: (a) repaid USD 19.3 million in order to comply with the latest borrowing
base and (b) drawn down USD 20.5 million as a result of a recent re-determination of the borrowing base.
The facility from Arab bank is secured by assigning the rights, title, benefits and interest in the shares of Jannah Hunt
Oil Company Limited to the bank as security. Further, receipts under the crude oil sales agreement with Exxon
Worldwide Trading Company have also been assigned to the bank as security. The loan is repayable in equal
quarterly instalments commencing from March 2014 with final maturity in December 2016. During the period ended
30 June 2014 the Group has repaid USD 10,000 thousand.
Subsequent to the period ended 30 June 2014, the amount outstanding under Reserve Based Facilities and the Arab
Bank Facility was repaid in full on 4 August 2014 from the proceeds of the 9.5% Senior Guaranteed Notes due 2019
(see note 35).
The initial transaction cost of USD 5,461 thousand (30 June 2013: USD 6,883 thousand) for securing the loans is
classified as a non-current asset and is being amortised over the period of the loans.
6 months ended 30 June 2013:
The loan from Qatar First Bank is secured by pledges on the asset of Kuwait Energy Yemen Limited. The loan
has been fully repaid in September 2013.
The reserve based facility of USD 165 million is secured by pledges on the assets of the subsidiaries Kuwait Energy
Egypt Ltd and Kuwait Energy Ukraine Ltd. The loan is repayable by 30 June 2017 and is measured at amortised cost
using the effective interest method. During the period the Group failed to comply with certain financial and non-
financial covenants within the loan agreement resulting in the potential event of default. Whilst the Group’s lenders
have historically never called any loans or issued any default notice in relation to the facility, the Group, prior to 30
June 2013, commenced discussions with the relevant lenders to renegotiate the loan terms. Although discussions were
on-going, at the 30 June 2013 no covenant waiver had been provided. As a result the non-current debt associated with
the facility was reclassified as current as at 30 June 2013. Since the period end the loan has been renegotiated and an
amended and restated agreement was signed on 18 September 2013. At 30 June 2013, the Group had undrawn loan
facilities amounting to USD 55 million, although the amount available for immediate draw down was limited to USD
nil based on the latest borrowing base approved by Deutsche Bank as determined by the forecast cash flows arising
from the borrowing base assets.
12 months ended 31 December 2013:
The reserve based facility of USD 165 million is secured by pledges on the assets of the subsidiaries Kuwait Energy
Egypt Ltd and Kuwait Energy Ukraine Ltd. This loan is repayable by 30 June 2017 and is measured at amortised cost
using the effective interest method. As at 31 December 2013, the Group has undrawn loan facilities amounting to
USD 60.5 million although the amount available for immediate draw down is limited to USD Nil based on the latest
borrowing base approved by Deutsche Bank as determined by the forecast cash flows arising from the borrowing base
assets.