Beleaguered shipping services firm Marco Polo Marine wants note holders to take a huge hit on a $50 million series of 5.75 per cent notes that were due in 2016.
It is asking that note holders allow the firm to redeem the bonds by January 2018 by paying $35,868 in cash and the same amount in 1.02 million shares priced at 3.5 cents apiece.
The proposal would amount to a combined redemption amount of just $71,736.
Shareholders will vote on the debt restructuring at a meeting on Nov 15 at Ocean Financial Centre.
Marco Polo, in its notice to note holders yesterday, said it has been in discussions with a group of investors to raise about $50 million to $60 million.
However, it said that as part of the conditions, it must undertake a restructuring of all its secured and unsecured debt.
Total borrowings were about $260.8 million as at June 30, comprising about $250 million in secured debt and $10.8 million in unsecured debt.
In addition, Marco Polo said it has contingent liabilities from guarantees provided in connection with the majority of loans taken by the group's companies.
Among the many risk factors the firm outlined in a separate statement, the company said it suffered net losses of $309 million for the nine months to June 30, and expects to record net losses for the full year. This will be mainly due to lower utilisation rates of its 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.
The firm added that if the extraordinary resolution is passed on Nov 15, it will be binding on all note holders, even if some did not vote for it.