KrisEnergy submits winding-up petition, says it is unable to pay its debts

Oil exploration firm KrisEnergy says it considered many factors including its liabilities that exceed the value of its assets.
Oil exploration firm KrisEnergy says it considered many factors including its liabilities that exceed the value of its assets.PHOTO: KRIS ENERGY

SINGAPORE - Embattled independent oil exploration firm KrisEnergy said it is unable to pay its debts and will proceed to liquidation.

The company submitted a winding-up petition to the Grand Court of the Cayman Islands last Friday (June 4), it said in a bourse filing that night. The hearing date for the petition has yet to be fixed.

In making this decision, KrisEnergy said it had considered several factors including its liabilities, which exceed the value of its assets; the "significantly lower" ultimate recovery and cash flow from the Apsara Mini Phase 1A development; the lack of an "acceptable" alternative restructuring option; as well as the lack of near-term infusion of funds available to the company.

In April, the company reported that its financial restructuring plan was no longer viable due to disappointing production performance at its Apsara oilfield offshore Cambodia.

It had been banking on revenue from production at Apsara to get it through a drawn-out restructuring process with debts to the tune of US$476.8 million (S$631.4 million).

The company's biggest shareholder is Keppel Corp, which has a total exposure to KrisEnergy of about S$420 million.

In an April research note, DBS Group Research analyst Ho Pei Hwa said the debts to Keppel are backed by first-rights claim on KrisEnergy's oil and gas assets. She noted that a significant portion of the amount should be recouped via asset sale if KrisEnergy goes under.

Trading in KrisEnergy shares was suspended in August 2019.