AusGroup, Marco Polo seek to extend bond maturities

A tug supply vessel operated by Marco Polo Marine's subsidiary PT BBR. Marco Polo, which is planning to seek consent for a bond maturity extension for $50 million worth of notes, says noteholders at an informal meeting "appeared generally supportive"
A tug supply vessel operated by Marco Polo Marine's subsidiary PT BBR. Marco Polo, which is planning to seek consent for a bond maturity extension for $50 million worth of notes, says noteholders at an informal meeting "appeared generally supportive".PHOTO: MARCO POLO MARINE

They are latest to do so as downturn in oil and gas sector continues to bite

Australian oilfield services firm AusGroup is seeking consent from noteholders to relax the terms on $110 million worth of notes due for maturity next month, as the industry downturn continues to bite.

In return, it would offer bondholders a more lucrative yield.

These series 1 notes, which came with a coupon rate of 7.45 per cent, were issued under the group's $350 million multi-currency debt issuance programme in 2014.

AusGroup said yesterday it is proposing to extend the original maturity date of the notes by two years to Oct 20, 2018. It is also looking to get a waiver for any non-compliance or potential non-compliance with various provisions of the trust deed notes, as well as make amendments including, but not limited to, the deletion of the financial covenants.

In return, the group will raise the interest rate to 7.95 per cent a year from Oct 20, 2016, to Oct 19, 2017, as well as to 8.45 per cent a year from Oct 20, 2017, to Oct 19, 2018.

It also plans to pay the interest on a monthly basis on the 20th of each month beginning on Nov 20 this year, instead of semi-annually.

Noteholders will vote for the extraordinary resolutions at a meeting set for Oct 5.

AusGroup added that shareholders and noteholders are advised to exercise caution in trading the shares and notes of the company. "There is no certainty or assurance as at the date of this announcement that the waivers will be obtained by the company," it said.

AusGroup reported a net loss of A$192.7 million (S$197 million) for the year ended June 30, mainly as a result of impairments amounting to A$137.1 million. This marked a stark contrast to its net profit of A$6.2 million the year before.

In a separate announcement, it said Mr Anthony John Tomic, group manager for shared services, people capital, will step down from his position with effect from tomorrow, as the "restructure of business (has resulted) in role redundancy".

Meanwhile, Marco Polo Marine is also planning to seek consent for a bond maturity extension for $50 million worth of notes maturing on Oct 18. This follows an informal meeting with its noteholders yesterday, which was convened to present an independent business review conducted by KPMG, and to explore the various options relating to the upcoming maturity of the notes.

Marco Polo said that noteholders who were present at the meeting had "appeared generally supportive" of the company's initiative.

It added that it has adjourned the informal meeting to Friday, to allow noteholders to digest the information presented by the company, including the proposed terms of the extension, as well as to receive further feedback from them.

AusGroup shares closed 0.6 cent or 12.2 per cent lower at 4.3 cents yesterday. Marco Polo Marine last traded at 8.4 cents last Friday.

Last week, container ship operator Rickmers Maritime said it has been offered a deal of up to US$260.2 million (S$355 million) to refinance all of its outstanding debt, which could extend the maturities of a large part of the trust's secured bank debts to the first quarter of 2021.

A version of this article appeared in the print edition of The Straits Times on September 14, 2016, with the headline 'AusGroup, Marco Polo seek to extend bond maturities'. Print Edition | Subscribe