Ailing shipbuilder Nam Cheong yesterday asked for its shares to be suspended, coinciding with concerns that its controlling shareholder, Malaysian tycoon Tiong Su Kouk, has no plans to help the firm clear its debts and ride out the oil price rout.
As a result, bond holders have begun to question the Tiong family's handling of the crisis.
On Thursday, just three days before bond holders were due to receive a $2.4 million interest payment, Nam Cheong announced that it would default on its bonds and cease all other debt repayments, in a late bid to "conserve cash".
The news took some by surprise. Just the night before, Nam Cheong had met bond holders informally to update them on its restructuring.
"They could have said something regarding that (non-payment) at the meeting. I think this is another indication that Nam Cheong is simply not transparent enough and does not believe in open communication with bond holders," said one bond holder, who wanted to be known only as Mr Tan.
A steering committee representing 60 bond holders is arguing that Nam Cheong has no right to avoid the interest payment.
Last year, amid a lifeless market for offshore supply vessels, Nam Cheong had sought the consent of bond holders to loosen financial covenants to get more wiggle room. In exchange, Nam Cheong assured them it would set up an escrow account.
The company would deposit interest payments into this Interest Service Reserve Account if its interest coverage ratio fell below 3 to 1.
A sum of $19.5 million now sits in that account - equal to two interest payments for each of the holders of its $365 million outstanding bonds.
But Nam Cheong now says it will release this money to bond holders only if it gets enough votes to push through its proposed restructuring plan under a court-supervised scheme of arrangement.
Bond holder Ong Chin Teik believes this is unreasonable, saying: "They have not filed for Chapter 11 bankruptcy protection."
Mr Ong and others represented by the steering committee have requested Nam Cheong to instruct DBS, the bonds' trustee, to release the payment. DBS was the arranger for Nam Cheong's junk bond issuance.
The group has also requested an appointment with executive chairman Tiong, who calls the shots in the company, but was absent from Wednesday's meeting.
Mr Ong said: "Face the problem and tell us what you want to do. If you think the business cannot be rescued, you've got to put the whole episode to an end instead of still taking a salary. If you think it's no longer viable, we can accept the failure. Don't hide behind PwC."
PwC is Nam Cheong's financial adviser. It did most of the talking at the meeting, although finance director John Tiong and chief executive Leong Seng Keat had been present.
Last year, Nam Cheong won the Silver Award at the Singapore Corporate Awards for Best Investor Relations among companies with a market cap of less than $300 million.