Subaru importer Japanauto Ltd. (TASE:JPNT.B1) today notified the TASE that it has reached a debt settlement with its bondholders. Under the proposed settlement, Japanauto will repay the balance of the principal on its bonds over six years, beginning from August 1, 2014. Payments will be semiannual, in February and August. Beginning in August 2014, interest payments will be made on schedule.
The bonds will bear 8% annual interest, and Japanauto will deposit with a trustee a safety cushion to guarantee the interest payments, in an amount equal to semiannual interest payment.
The bondholders will receive an upside mechanism to share in Japanauto's success. Subject to meeting biennial cumulative gross profit margin targets, the company will pay bondholders an additional 1.5% interest a year on top of the 8%, on the condition that the interest payment does not push the company from profit to loss.
Under the payment table published by Japanauto, the cumulative gross profits and gross profit margins will be as follows: a gross profit margin of 14.1% on a gross profit of at least NIS 162 million in 2013-14; a gross profit margin of 13.2% on a gross profit of at least NIS 191 million in 2015-16; and a gross profit margin of 13.2% on a gross profit of at least NIS 227 million in 2017-18.
As long as Gad Zeevi or a relative serves as chairman of Japanauto, the salary will be $14,000 a month.
Published by Globes [online], Israel business news - www.globes-online.com - on August 22, 2012
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