Malaysia’s Perisai Petroleum ‘insolvent’

Perisai Petroleum, a struggling Bursa Malaysia-listed oilfield services provider, is now a PN17 company, after failing to pay its interest to noteholders, and declaring itself insolvent.

According to a definition by KLM Management, PN17 is issued by Bursa Malaysia, to companies that are in financial distress. Companies that fall within the definition of PN17 will need to submit their proposal to the Approving Authority to restructure and revive the company in order to maintain the listing status. If a company fails to do so, it will be delisted from the Malaysian stock exchange.

Perisai on Wednesday said its Perisai Capital subsidiary would not be able to meet the payment of the principal and interest of notes, and as such, the company is insolvent.

Providing reasons for not being able to pay, Perisai said it was, together with subsidiaries, operating under adverse financial conditions.

“With the current market downturn, the Group’s business has been negatively affected by market conditions in the oil & gas sector, including weak crude oil prices and slow economic growth,” Perisai said.

“The offshore oil & gas industry has remained uncertain and volatile and as the market remains depressed in 2016, the Group continues to see challenging times as the demand for the Group’s offshore assets and services continue to remain low,” the company said, adding that a result Perisai Capital, it’s subsidiary, is not able to meet payment of the principal and interest in respect of the Notes due on 3 October 2016.

To remind, Perisai on October 3, 2016 held a meeting of the holders of SGD$125 million 6.875% multicurrency medium term notes of the company’s subsidiary Perisai Capital, where noteholders rejected the company’s debt restructuring plan.

Persiai had hoped to receive waivers for the non-payment of principal interest for S$125 million notes due on October 3 and was hoping it would be able to defer the interest payment and maturity date to February 2017.

The company received a notice dated October 10, 2016, from the Trustee of the Notes notifying that an event of default for payment of principal and interest of the Notes has occurred.

Also, Perisai earlier this week said it was working on measures to address the default in payment. As announced on October 3, 2016 Perisai, together with its joint venture partner, Emas Offshore Limited had, on September 30, 2016, received an indicative offer of financing from a financial institution.

“Part of the amount from the indicative offer would be earmarked towards a mutually acceptable resolution with Perisai Capital’s Noteholders with regards the Notes through the availability to the Perisai Group of a sum of approximately $20 million. It is on this basis Perisai Capital intends to engage with the Noteholders on an alternative proposal,” Perisai said.

Offshore Energy Today Staff