Marco Polo gets backing to issue new securities

Strong shareholder support at EGM for debt restructuring plan

Marco Polo Marine shareholders backed a move to issue new securities that are key to the offshore and marine (O&M) company's restructuring plan.

The overwhelming support at yesterday's extraordinary general meeting came despite the firm's controlling shareholder abstaining from voting for one of the two resolutions tabled. The firm won 98.64 per cent approval for the first resolution and 99.94 per cent backing for the second.

The first resolution pertains to issuing new shares to nine investors and creditors, and warrants to existing shareholders. The second relates to new shares being issued to RSM Corporate Advisory as settlement of professional fees.

Controlling shareholder and executive chairman Lee Wan Tang and investment firm Nautical International Holdings abstained from voting for the first resolution.

Marco Polo has cited related party concerns for this. It is understood that Mr Lee and Nautical abstained because the chairman's two children Sean and Liely are eligible for new strategic investors' incentive plans tabled with the company's restructuring proposal.

The abstention was said to be a gesture to reassure minority shareholders, even though Mr Lee's irrevocable undertaking to vote in support of the resolution has been a condition for the $60 million injection from nine investors.

The Lee siblings will be entitled to certain incentives - both in cash and shares - if they carry on as part of Marco Polo's management team and meet certain milestones.

National University of Singapore's Professor Mak Yuen Teen noted that eight out of the nine investors have no experience in the O&M industry. He added the new equity injection would be conditional on the retention of the existing management and some incentives have to be extended to motivate them.

That said, the Lee family has also agreed to dilute their controlling shareholding to 6 per cent from 62 per cent, to pave the way for the new equity injection.

Marco Polo has proposed to issue 2.1 billion shares at 2.8 cents each to the nine investors, which include existing shareholder Ho Lee Group.

The latter holds nine million Marco Polo shares while its director and shareholder, Mr Micheal Tan Hai Peng, has 800,000.

Marco Polo has proposed to issue 269.2 million free warrants on the basis of eight warrants for every 10 common shares held to its other existing shareholders. Each warrant has an exercise price of 3.5 cents.

It will also place about one billion shares at 3.5 cents each with its creditors. Another 57.1 million shares at 3.5 cents apiece will be issued to RSM Corporate Advisory.

Marco Polo and its key operating subsidiary are seeking to restructure under two schemes of arrangement filed with Singapore's High Court.It has one more hurdle to clear before it can proceed with restructuring under the two schemes.

It needs to secure the green light from the Indonesian court for the restructuring of its Batam-based subsidiary.

A version of this article appeared in the print edition of The Straits Times on December 15, 2017, with the headline 'Marco Polo gets backing to issue new securities'. Print Edition | Subscribe