SINGAPORE - Heavy equipment supplier Hoe Leong Corporation has unveiled more details on its plans to restructure nearly S$80 million in debts owed to creditors.

The mainboard-listed group told the Singapore Exchange on Thursday (Nov 23) that it has proposed a scheme of arrangement to certain banks and its controlling shareholder, Hoe Leong Co.

Hoe Leong owes around S$63 million to the bank creditors, and S$14 million to Hoe Leong Co.

Under the scheme, Hoe Leong will restructure debts amounting to S$20.7 million into vessel loans and spare part loans to be repaid by the group, it said.

The remaining S$56.3 million in debts will be "extinguished" through the allotment, issuance and distribution of new ordinary shares. The issue price of these shares will be calculated by reference to the volume weighted average share price traded in the immediate 22 trading days before the share distribution, per scheme share to the scheme creditors.

The loans amounting to S$14 million granted by Hoe Leong Co will similarly be converted into new shares.

The scheme is subject to a number of conditions being met, including the approval by a majority or three-fourths in value of each class of scheme creditors casting their votes, as well as a court sanction.

Hoe Leong added it has applied to the court to seek a moratorium on creditors taking action against the company or its relevant subsidiaries.

In an announcement last Friday, Hoe Leong said that it has despatched the scheme document to its creditors, who are to submit their vote on the scheme by Dec 4, 5pm.

Hoe Leong shares were down 4.2 per cent, or 0.2 Singapore cent, to 4.6 Singapore cents as at 3.30pm on Thursday, after the announcement was made at noon.