OHLA has asked its creditors for a waiver to breach certain terms of its financing agreements following a recent ruling by Qatari courts ordering the construction company to pay 26.4 million euros in damages to Kentz and Voltas, subcontractors for the Sidra Hospital project in Doha.
The Qatari court dismissed the cassation appeals filed by the joint venture formed by OHLA and Contrack Cyprus, as well as by Kentz Qatar and Voltas Qatar, and upheld the Court of Appeal’s ruling. The Spanish company, which holds a 55% stake in the joint venture, has announced that it will resort to all available legal resources to defend its interests.
The main risk for OHLA would arise if the subcontractors attempt to enforce the ruling against the construction company’s assets located outside Qatar. To do so, they would have to initiate an exequatur procedure in Spain, whereby Spanish courts recognize and allow the enforcement of a foreign judicial decision. In light of this scenario, OHLA has asked banks to waive any default event arising from a potential enforcement order regarding its credit lines and guarantees.
The waiver would extend until January 3, 2027—unless bondholder resolutions are approved beforehand—the termination date of the corresponding financing, or until the exequatur ruling becomes final and binding, whichever occurs first.
The construction company has also asked holders of its bonds, which total 342.79 million euros and mature in late 2029, to waive potential defaults arising from the ruling and any eventual early debt acceleration.
OHLA and Kroll, acting as the solicitation agent, believe that avoiding a default is beneficial for bondholders, given the risk of a cross-default on other financial debt and potentially more severe consequences for the group’s financial situation and operations.
