Versions

 

6. Duties of Trustees

6.1 Without prejudice to the generality of Articles (156), (162), (163) and (164) of the Commercial Companies Law, a trustee for the holders of Debt Securities:—
(a) shall exercise reasonable diligence to ascertain whether or not the assets of the borrowing corporation and of each of its guarantor corporations which are or may be available, whether by way of collateral or security or otherwise, are sufficient or are likely to be or become sufficient to discharge the principal debt as and when it becomes due;
(b) shall satisfy itself that each prospectus relating to the Debt Securities does not contain any matter which is inconsistent with the terms of the Debt Securities or with the relevant trust deed;
(c) shall ensure that the borrowing corporation complies with Chapter 5 of the Commercial Companies Law, or its equivalent rules and regulations, so far as it relates to the Debt Securities and is applicable;
(d) shall exercise reasonable diligence to ascertain whether or not the borrowing corporation and each of its guarantor corporations have committed any breach of the covenants, terms and provisions of the Debt Securities or the trust deed;
(e) except where it is satisfied that the breach will not materially prejudice the collateral or the security, if any, for the Debt Securities or the interests of the holders of the Debt Securities, shall take all steps and take all such actions as it is empowered to do to cause the borrowing corporation and any of its guarantor corporations to remedy any breach of those covenants, terms and provisions;
(f) where the borrowing corporation or any of its guarantor corporations fails when so required by the trustee to remedy any breach of the covenants, terms and provisions of the Debt Securities or the trust deed, may place the matter before a meeting of holders of the Debt Securities, submit such proposals for the protection of their interest as the trustee considers necessary or appropriate and obtain the directions of the holders in relation thereto; and
(g) where the borrowing corporation submits to those holders a compromise or arrangement, shall give to them a statement explaining the effect of the compromise or arrangement and, if it or he thinks fit, recommend to them an appropriate course of action to be taken by them in relation thereto.
6.2 Where, after due enquiry, the trustee for the holders of the Debt Securities at any time is of the opinion that the assets of the borrowing corporation and of any of its guarantor corporations which are or should be available whether by way of collateral or security or otherwise, are insufficient, or likely to become insufficient, to discharge the principal debt as and when it becomes due, the trustee may apply to the Agency for an order under this Chapter.
6.3 Without prejudice to the generality of Articles (146) and (164) of the Commercial Companies Law, the Agency, on such application:—
(a) after giving the borrowing corporation an opportunity of making representations in relation to that application, by order in writing served on the corporation at its registered office in Bahrain, may impose such restrictions on the activities of the borrowing corporation, including restrictions on advertising for deposits or loans and on borrowing by the corporation as the Agency considers necessary for the protection of the interests of the holders of the Debt Securities; or
(b) may, and if the borrowing corporation so requires, shall direct the trustee to apply to the court for an order; and the trustee shall apply in accordance with the court order.
6.4 Where:—
(a) after due enquiry, the trustee at any time is of the opinion that the assets of the borrowing corporation and of any of its guarantor corporations which are or should be available, whether by way of collateral or security or otherwise, are insufficient or likely to become insufficient, to discharge the principal debt as and when it becomes due; or
(b) the borrowing corporation has contravened an order made by the Agency under 6.2, the trustee may, and where the borrowing corporation has requested the trustee to do so, shall apply to the court for an order.
6.5 A trustee in making any application to the Agency or to the court shall have regard to the nature and kind of the collateral or the security given when the offer or invitation in respect of the Debt Securities was made to the public, and if no security was given shall have regard to the position of the holders of the Debt Securities as unsecured creditors of the borrowing corporation.
6.6 A trustee may rely upon any certificate or report given or statement made by any advocate and solicitor, auditor or officer of the borrowing corporation or guarantor corporation, if it has reasonable cases for believing that such advocate and solicitor, auditor or office was competent to give or make the certificate, report or statement.