CH Offshore granted a US$4.1 million (S$5.5 million) loan to Falcon Energy Group this year to help the offshore oil and gas contractor meet obligations to its banks. This was largely because Falcon Energy had earlier pledged its shares in CH Offshore to a bank to secure a loan.
The loan was revealed by CH Offshore yesterday in response to queries by the Singapore Exchange (SGX).
The SGX asked for details on how the US$4.1 million receivable came about, as disclosed in the firm's annual report for the year ended June 30 and in its first-quarter financial statements for the period ended Sept 30.
CH Offshore said that Falcon has bonds as well as a number of bank loans.
"Falcon's shares in CH Offshore have been pledged to one of the banks to secure the loan. Falcon's inability to meet its payment obligations to any one of the said banks may trigger cross default across all its bank loans, resulting in the possibility of a large block of CH Offshore's shares being forced-sold in the open market," said CH Offshore.
The firm said it granted the loan to Falcon after taking into consideration its shares being forced-sold in the market by the bank, "which could destroy shareholders' value and create uncertainty in the market place regarding CH Offshore's continuing viability and equity support".
"In short, the loan to Falcon was in the best interest of CH Offshore and its shareholders."
The Straits Trading Company said yesterday that its indirect subsidiary entered into a sale-and-purchase agreement to acquire an office building in Perth, Australia, for about A$54.2 million (S$55.1 million).
Its subsidiary bought 45, St Georges Terrace through a joint venture with indirect subsidiary 45SGT Unit Trust and St Georges Terrace Real Estate Netherlands.
The property is an 11-storey office building with two basement levels in the main commercial thoroughfare of Perth's central business district, the group said in a filing with the SGX after the market closed.
The purchase, which will be funded by internal resources and bank borrowings, comes as part of Straits Trading's strategy of redeploying capital from low-yielding investment properties to potentially higher return real estate opportunities.