SINGAPORE - Beleaguered shipping services firm Marco Polo Marine is seeking noteholders' approval to take a big haircut and waive key obligations for a S$50 million series of 5.75 per cent notes due 2016.
The company is asking, among other things, that noteholders allow the company to redeem the bonds by January 2018 by paying S$35,868 in cash and the same amount in 1.02 million shares priced at 3.5 Singapore cents per share, amounting to a combined redemption amount of S$71,736.
They will vote on the debt restructuring at a meeting to take place at 11am on Nov 15 at Ocean Financial Centre.
Marco Polo said in its notice to noteholders on Tuesday (Oct 24) that it has been in discussion with a group of investors to raise about S$50 million to S$60 million, but as part of the conditions to this, it must undertake a restructuring of all of its secured and unsecured debt.
As of June 30, 2017, total debt was about S$260.8 million, comprising about S$250 million in secured debt and S$10.8 million in unsecured debt.
In addition, Marco Polo said it has contingent liabilities from guarantees provided in connection with the majority of the loans taken on by the group companies.
Among the many risk factors the company outlined in a separate statement, Marco Polo said it suffered net losses of S$309 million for the nine months ended June 30, 2017, and expects to record net losses for the full year. This will be mainly due to lower utilisation rates of the group's vessels and lower charter rates, decreased revenues from the shipbuilding business and various impairment charges.
There cannot be any assurance that the company will be able to continue as a going concern, it said.
It added that if passed, the extraordinary resolution will be binding on all noteholders, even if a noteholder did not vote for it. This includes all claims against the company resulting from any breach of the financial covenants or any non-payment of the outstanding principal amount of the notes on the original maturity date, which will be waived if the extraordinary resolution is passed.