In a landslide vote, holders of six series of notes and perpetuals gave Ezion Holdings the green light for the proposed refinancing of about $575 million of securities, a move that gives the group extra runway to tide over what could be the last leg of a multi-year downturn in the offshore and marine industry.
Ezion disclosed after trading closed yesterday that between 93.5 per cent and 98.82 per cent of holders of Series 3 to 7 notes and Series 8 perpetuals, present at an earlier consent solicitation exercise (CSE), voted in favour of its proposal to push out maturity of and cut coupon rates on these securities.
The CSE held on Monday also saw holders of between 83.33 per cent and 96.14 per cent of the principal values of each series of these securities represented at the vote.
This effectively meant yesterday's majority vote had met the required 75 per cent quorum under Singapore's debt restructuring regime. Ezion has thus won the green light to press on with the refinancing of these securities.
The refinancing proposal called on holders of these securities to agree on slashing coupon rates to 0.25 per cent per annum from rates ranging between 4.6 per cent and 7 per cent.
These stakeholders were further offered two options that provide for securities to be swapped into shares at a conversion price of 27.63 cents.
Ezion had tabled two other options that provide for holders of notes and perpetuals who wish to opt out of equity swaps to pick up Series A and Series C notes, respectively. With Series A and Series C notes, principal redemption of these securities will be pushed out for seven years and 10 years, respectively.
In exchange for this extra runway, Ezion has extended holders of securities going with these two options, a 5 per cent redemption premium.
But the debt-laden O&M group will stand to deleverage only with the equity swap options, and yesterday's vote outcome pointed to some progress on this front.
Holders of $333 million of notes and $119.5 million of perpetuals have elected or are deemed to have elected the options extending equity swap flexibility.
Conversely, holders of $92 million of notes and $30.5 million of perpetuals, have elected or are deemed to have elected for Series A and Series C non-convertible bonds, respectively.
In either case, Ezion has beyond doubt won a landslide vote in favour of what investor watchdog group, Securities Investors Association (Singapore) (Sias), considered as "the largest and most complex" of refinancing proposals in the industry.
Sias founding president, Mr David Gerald, added that the vote outcome reflected the stakeholders' confidence in its recovery.
Ezion's chief executive Chew Thiam Keng added that their "votes of confidence" have given the company "the much-needed safe harbour as we sail into the winds of sectorial recovery".
The successful refinancing of the $575 million securities provides the key to unlock a US$100 million working capital line from the group's senior lenders so that it can mobilise its fleet for work.
Mr Chew acknowledged though, in his statement yesterday, that Ezion still needed support from two other key stakeholder groups - bank lenders and shareholders.