HRU S.A., the entertainment and gambling company that administers the Maroñas National Racecourse, successfully obtained a note-holders waiver to a technical default to its US$ 30,000,000 Secured Notes.
Due to the COVID-19 emergency, during several periods of 2020 the gambling and entertainment centers remained closed to public. Such circumstance directly affected HRU´s earnings, which also affected the financial covenants HRU has to fulfill under the Notes. Specifically, an earnings/debt ratio.
In order to avoid default, HRU requested its major note-holders for the granting of a waiver. The waiver was successfully obtained through a Noteholders Meeting, which was conducted by BEVSA who acted as trustee. Furthermore, as one of the conditions of the waiver, HRU deposited the Notes´ debt service of 2022, as security for the fulfillment of the Notes. This deposit was agreed with Banco Itaú Uruguay S.A., who acted as Payment Agent, and Fidential S.A., who acted as collateral agent.
The transaction was particularly demanding, given that HRU needed to cure the default by the end of March, in order to distribute dividends to its shareholders.