Shipbuilder and vessel charterer ASL Marine has became the latest company here to launch a consent solicitation exercise to push back outstanding debts owed to investors amid a liquidity crunch.
As it had earlier indicated in informal meetings with bond holders, ASL Marine announced yesterday that it wants to defer payment on its $150 million fixed-rate notes by three years. In exchange, it is offering investors a coupon step-up of 0.5 per cent a year and a redemption of 2.5 per cent of the notes principal every six months.
The company has also taken feedback from bond holders and thrown in some new enhancements to sweeten the offer, including granting them partial security on their loan.
This would be in the form of a subordinated floating charge over a group of vessels owned by the group which are mortgaged to secure a $99.9 million loan facility, among other things.
Also in response to feedback, the company is now seeking to amend rather than waive its required interest coverage ratio.
ASL Marine said on Nov 29 that it was not likely to be able to repay note holders on agreed dates, given liquidity constraints amid the oil price rout.
ASL Marine joins other Singdollar bond issuers, including AusGroup, Marco Polo Marine, Rickmers Maritime Trust, Swissco, Ezra, KrisEnergy and Perisai Petroleum Teknologi, that have sought leniency from bond holders in recent months to weather the downturn.
Another issuer, Dyna-Mac, also conducted a consent solicitation exercise in September for the early redemption of its notes.
If ASL Marine bond holders vote in favour of the offer at a meeting scheduled for Jan 20, ASL's $100 million note due next March 28 will be extended to March 28, 2020. Another $50 million note due on Oct 1, 2018 will be extended to Oct 1, 2021.
ASL Marine said last week that it had raised gross proceeds of about $25.17 million from an oversubscribed rights issue.
The Ang family, who together hold a 67 per cent stake in ASL, subscribed for all of their rights entitlements, effectively giving ASL a cash injection of $16.8 million.
ASL has also received approval from the three local banks to give it conditional access to a $99.9 million five-year club term loan facility.
The counter closed unchanged at 12.9 cents yesterday.