Cosmo Oil May Breach
Cosmo Oil Co., a Japanese refiner partly owned by the government of Abu Dhabi, may breach asset reserve covenants on some bank loans and will soon start talks with lenders to resolve the issue.
“We are in talks with financial institutions on the possible breach of some covenants,” Cosmo Oil spokesman Katsuhisa Maeda, said by phone. He declined to give details.
The company is at risk of violating covenants on about 40 percent of 130 billion yen ($1.7 billion) in loan , said two people with direct knowledge of the talks, declining to be identified because the information is private.
Cosmo will ask Mizuho Corporate Bank Ltd. and other lenders to relax the covenants after it releases first-half earnings in November, one of the people said. Cosmo forecast on Sept. 25 a first-half net loss of 81 billion yen, reversing an earlier estimate of a 7 billion yen profit, partly because of an accident that shut its Chiba refinery.