AusGroup proposes to exchange debt for shares to holders of its $110m 7.95% notes due 2018

SINGAPORE - oilfield services provider AusGroup is proposing to invite holders of its S$110 million 7.95 per cent notes due 2018 to exchange any or all of their outstanding notes for new shares in the company.

The exchange offer will start at 9am on Monday (Sept 11) and expire at 5 pm on Sept 28, the mainboard-listed frim said in a pre-market filing. The settlement date of the exchange offer is expected to be Sept 29.

The maximum sum involved in the exchange offer is S$5.55 million, which includes interest accrued on notes accepted for exchange by AusGroup, from and including Sept 20. This is based on the assumption that the maximum number of notes are validly offered for exchange under the exchange offer by Sept 28, and are accepted for exchange by the company on Sept 29.

AusGroup may potentially issue up to 95.7 million new shares to noteholders in satisfaction of the maximum exchange sum without exceeding the general share issue mandate.

Shareholders should note that the description of the principal terms of the exchange offer is indicative only and that the terms of the offer are subject to changes the company may deem fit, it said. The final terms of the exchange offer will be contained in a letter to noteholders and its accompanying documents.

The company said the purpose of the exchange offer is to build on the success of its business restructuring, and to improve its net asset position on its balance sheet by reducing debt and increasing paid-up capital.

It is also aimed at reducing interest costs; improving its ability to raise funds from financial markets and improving its ability to win new contracts from potential customers.