Ezion to redeem $120m DBS-backed notes

Ezion Holdings is set to fully redeem its $120 million 3.65 per cent notes backed by DBS Bank, according to bond holders.

A number of them said they received letters on the early redemption from their respective private banks yesterday. The notices did not state any reason behind the move.

The early redemption of the notes - due in 2020 - will be carried out on Monday, the same day Ezion is due to make a coupon payment.

This was as Ezion did not set aside the funds for the coupon payment earlier this week as would be the normal practice, a source said. According to the trust deed, DBS will redeem the notes at their principal amount on the interest payment date if Ezion does not set aside money for a coupon payment.

However this is good news as bond holders will at least be getting back their principal.

In September, note holder Ravi Murarka served Ezion a redemption notice, citing the note clause that he can demand to be paid back in full "in the event that the shares of the issuer cease to be listed or traded". He then sought a court declaration that Ezion's shares had ceased to be traded on the SGX after Ezion suspended trading of its shares on Aug 14, 2017 to discuss a debt reorganisation plan with lenders. Its shares are still suspended.

In November, the Singapore High Court approved Ezion's application to strike out the originating summons Mr Murarka had taken out against the company.

Like many cash-strapped, highly-leveraged offshore and marine players, Ezion had struggled to meet its financial obligations to lenders and capital expenditure. Ezion is now in its last leg of its debt restructuring, having secured the backing of note holders. It now has to win over the approval of its secured lenders.

Holders of six series of notes and perpetuals in November voted in support of Ezion's proposal to push out maturity of and cut coupon rates on some $575 million securities.

The refinancing proposal called on the note holders to agree on slashing coupon rates to 0.25 per cent a year from rates ranging between 4.6 per cent and 7 per cent. The note holders were also offered two options that allow them to swap securities to shares in the company at a conversion price of 27.63 Singapore cents.

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A version of this article appeared in the print edition of The Straits Times on February 02, 2018, with the headline Ezion to redeem $120m DBS-backed notes. Subscribe