Baker Technology, along with private equity firm Point Hope, has entered into a binding term sheet with Emas Offshore (EOL) to potentially invest US$50 million (S$67.8 million) in EOL to aid in the group's financial restructuring.
Baker Tech and Point Hope will each invest US$25 million in cash.
Baker Tech will be making the investment through its unit, BT Investment. EOL intends to restructure by way of a court-approved scheme of arrangement to deal with settlement and discharge of outstanding debts, and the issuance of new shares in EOL to Baker Tech and Point Hope.
This would result in Baker Tech and Point Hope owning a majority of the share capital of EOL. Details of the investment and the restructuring exercise are yet to be finalised.
Baker Tech and Point Hope said they intend to retain the key management of the EOL Group to ensure that its operations are not impacted by the restructuring.
The term sheet may be terminated and the restructuring abandoned if the restructuring exercise is not under way by Oct 30, or if the scheme application is not filed by then.
Shares of Baker Tech fell one cent or 1.72 per cent to 57 cents yesterday before the announcement was made.
EOL shares have been suspended since March. The subsidiary of Ezra Holdings had been trying to work out a refinancing package with lenders since last year.