Rickmers Maritime

Bond holders push for repayments

Trustee-manager says it received a new letter of demand from lawyers, on behalf of a group

Some of the bond holders who were filing a notice demanding payment with the trustee of Rickmers Maritime on Sept 28.
Some of the bond holders who were filing a notice demanding payment with the trustee of Rickmers Maritime on Sept 28.ST FILE PHOTO

Bond holders of offshore and marine companies here are pushing for the repayment of their investments, as financial stresses in the troubled sector continue to rise.

The trustee-manager of Rickmers Maritime Trust said yesterday it has received a further letter from legal firm Rajah & Tann Singapore, on behalf of a group of bond holders, demanding the immediate payment of their share of the $100 million notes the trust is trying to restructure.

This comes less than two weeks before investors vote to decide if they want to accept the debt restructuring offer or send Rickmers Maritime into liquidation.

The trustee-manager said that in the letter, the bond holders were said to "wish to directly take such legal steps and actions against the trust to enforce repayment of the notes, together with accrued interest". This was on the basis that DB International Trust, the notes' trustee, has "failed to institute any action against the issuer" since bond holders purportedly made a written request to the trustee on Sept 28, informing the trust that the notes are immediately repayable.

The trustee-manager added that it is in the process of validating the contents of the letter.

It also said it has not received any notice from the trustee that the notes are immediately due and payable, and that the letter does not provide any evidence that the trustee has become bound to give such notice or that the trustee has failed to do so within a reasonable period.

The trustee may, at its discretion, and if requested by holders of at least 25 per cent of the notes, give notice that the notes are immediately due and repayable, according to the statement. "No note holder shall be entitled to proceed against the trust unless the notes' trustee, having become bound to do so, fails to do (so) within a reasonable period and such failure is continuing."

The trustee-manager has called for an extraordinary general meeting on Oct 31, where bond holders will vote on the proposed swap of the $100 million principal 8.45 per cent notes due next May for $40 million worth of notes due in November 2023. The rest of the principal sum will be exchanged for 60 per cent of the trust, after the issuance of 1.32 billion new units.

A successful restructuring would allow the container ship operator to obtain a new term loan facility of up to US$260.2 million from a consortium of banks.

Separately, bond holders of Kuala Lumpur-listed Perisai Petroleum Teknologi are angry the offshore services firm has yet to respond to their request to accelerate repayment of the $125 million 6.875 per cent notes, which had been due on Oct 3.

A bond holder told The Straits Times that Perisai has not been in contact with bond holders and their lawyers at Rajah & Tann since Oct 3. He said bond holders will take further steps to enforce their rights against Perisai - which includes filing for it to be wound up - if the firm continues to fail to provide a "satisfactory response".

Perisai on Tuesday announced that it received a notice of demand from the notes' trustee the day before. It is seeking legal advice on the notice and will make announcements as and when necessary.

Perisai is an associate company of Singapore's Ezra Holdings - the latest in the troubled sector that is appealing to bond holders to loosen bond convenants. But Ezra bond holders face a hard decision as the firm is seeking not only to waive financial covenants, but also for investors to give up their right to demand immediate repayment should any attempted restructuring prove unacceptable to bond holders.

A version of this article appeared in the print edition of The Straits Times on October 21, 2016, with the headline 'Bond holders push for repayments'. Print Edition | Subscribe