Information on the Financial Covenants for Green Bonds

Under the base prospectus for bonds approved by the Bank of Lithuania on 25 November 2019 (hereinafter – the Prospectus), AUGA group, AB (hereinafter – the Company) issued bonds with a total nominal value of EUR 20,000,000. Among other provisions, the Prospectus stipulates financial covenants including: i) an interest coverage ratio of no less than 2, and ii) a consolidated-equity-to-asset ratio of no less than 30% (hereinafter – the Financial Covenants).

These Financial Covenants are calculated each year on the basis of the audited annual financial statements. If the Company does not meet the Financial Covenants, the Prospectus envisages a remediation period of 6 (six) months to rectify the financial conditions.

The Company published its audited financial statements for 2023 on 30 April 2024. In those financial statements, the Company indicated that the Financial Covenants had not been met and therefore, together with UAB AUDIFINA, the bondholders’ trustee (hereinafter – the Trustee), noted that fact and established a six-month period ending 30 October 2024, as envisaged in the Prospectus and publicly announced, during which the Company had an opportunity to correct the non-compliance in the Financial Covenants.

The process of rectifying financial terms as described in the Prospectus for the bonds is not unambiguously clear, as the Prospectus specifies that the above-mentioned indicators (both the interest coverage ratio and the consolidated-equity-to-asset ratio) shall be calculated once a year on the basis of the consolidated audited annual financial statements and that the rectification period shall be a six-month period, though audited annual financial statements for the Company are not prepared for such a period.

In the opinion of the management of the Company, based on the information available as at the date of this notice, the Company did not rectify its non-compliance with the Financial Covenants during the period ended 30 October 2024, and therefore the Company today contacted the Trustee with information regarding the non-compliance with the Financial Covenants and the possible resolution of the situation.

Contacts:
CFO of AUGA group, AB
Kristupas Baranauskas
+370 5 233 5340