Halcyon Agri Corporation Discloses Key Loan Agreements and Shareholding Covenants

Overview

Halcyon Agri Corporation Limited (“Halcyon Agri” or the “Company”) has made a significant announcement regarding its recent secured loan facilities and the critical covenants attached to these financing agreements. These developments are highly relevant to shareholders and potential investors as they involve substantial financial amounts and conditions that, if breached, could trigger events of default with serious implications for the Company’s liquidity and overall financial stability.

Key Points from the Disclosure

• Secured Loan Facilities:
  • The Company has secured two Working Capital Loan Facilities totaling RMB 1.5 billion (RMB 350 million and RMB 1.15 billion) from Export-Import Bank of China, Hainan Branch (“EXIM Bank”).
  • A USD 40 million Revolving Credit Facility has been obtained from Cooperatieve Rabobank U.A., Singapore Branch (“Rabobank”).
• Critical Shareholding Covenants:
  • For the EXIM Bank Facilities, Halcyon Agri must ensure that China Hainan Rubber Industry Group Co. Ltd. (“Hainan Rubber”) directly or indirectly owns at least 51% of the issued ordinary shares of the Company until the facilities are fully repaid.
  • For the Rabobank Facility, Halcyon Agri must ensure:
    • Hainan Rubber legally and beneficially owns more than 50% of the voting rights of the Company’s share capital.
    • Sinochem International Corporation Co. Ltd. (“SIC”) legally and beneficially owns more than 25% of the voting rights in the Company.
    • Hainan State-owned Assets Supervision and Administration Commission legally and beneficially owns more than 50% of the voting rights in Hainan Rubber.
    • State-owned Assets Supervision and Administration Commission legally and beneficially owns more than 50% of the voting rights in SIC.
• Default Events and Implications:
  • Breach of the above covenants for the EXIM Bank Facilities will trigger an event of default, requiring immediate repayment of outstanding amounts if so demanded by the bank.
  • Similarly, breach of the Rabobank Facility covenants will trigger a Termination Event, allowing Rabobank to demand immediate repayment of all outstanding amounts.
• Potential Impact on Other Loan Facilities:
  • If the Company fails to repay the outstanding amounts under the EXIM Bank and Rabobank Facilities due to such default events, other Group loan facilities totaling approximately USD 305 million (excluding interest and funding costs) as of end December 2025 may also be affected. This could have a severe impact on the Group’s financial position.
• No Current Breach:
  • As of the date of the announcement (15 January 2026), none of these default events have occurred.

Important Considerations for Shareholders

• Shareholding Structure Sensitivity: The covenants require the maintenance of specific shareholding levels by Hainan Rubber, SIC, and their respective controlling state-owned entities. Any change in the Company’s shareholding structure that breaches these thresholds could immediately trigger repayment demands on significant borrowings.
• Potential Financial Risk: In the event of a breach, the Company’s total exposure could extend beyond the disclosed facilities, affecting an additional USD 305 million in loan facilities. This poses a material risk to the Company’s financial stability and could impact share price.
• Price Sensitivity: Shareholders should note that these covenants tie the Company’s financial health to the ongoing ownership structure. Any corporate actions, market transactions, or strategic moves that affect shareholding percentages could have immediate and significant financial consequences.
• Regulatory and Strategic Implications: The involvement of state-owned entities and large corporate shareholders in these covenants underlines the strategic importance of maintaining their controlling interests. Investors should monitor any news or changes regarding these shareholders closely.
• No Immediate Trigger, but Ongoing Risk: While no breach has occurred to date, the risk remains ongoing for as long as the facilities are outstanding.

Conclusion

This announcement is highly relevant and potentially price sensitive. A breach of the shareholding covenants could trigger defaults on substantial loan facilities, risking immediate financial strain and a potential knock-on effect on the Company’s share price and financial health. Investors are strongly advised to monitor the Company’s shareholding structure and any developments involving Hainan Rubber, SIC, and their controlling entities.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors are urged to exercise caution when trading in Halcyon Agri Corporation’s securities and to consult their financial, tax, or other advisors where in doubt. The information provided reflects the latest announcement from the Company as of 15 January 2026, and future changes or events may materially affect the Company’s financial position and share price.

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