Nam Cheong stops servicing debt amid restructuring talks

Nam Cheong, a Singapore-listed offshore vessel owner, on Thursday said it would temporarily stop repayment on all of the company’s borrowing, while it looks at the debt restructuring options.

This means, Nam Cheong said, that the company will not be making payment of the next coupon payment due on July 23, 2017 with respect to the Series 004 Notes.

Kuala-Lumpur based Nam Cheong, hurt by an oversupply in the OSV market, coupled by low oil prices, said that, based on the financial statements of the group for the first quarter ended March 31, 2017 its debt to banks and noteholders stood at RM1,8 billion ($429,5 million).

The company, which is both building and chartering offshore support vessels, has appointed PricewaterhouseCoopers Advisory Services Pte. Ltd. as its financial advisor to advise and assist the Group, as appropriate, on suitable restructuring options for the group.

“The company has started discussions with the Group’s bank lenders with a view to restructure the group’s bank facilities. The company will also continue to engage in discussions with all stakeholders, including the holders of the Notes and trustee of the Notes, with respect to the restructuring to arrive at a restructuring plan that will achieve a fair and acceptable resolution for all stakeholders and position the Group to ride out the challenging market environment,” Nam Cheong said.

The company on Friday requested a trading halt for its shares on the Singapore exchange.

Earlier this week, at an informal meeting with shareholders, the company shared a presentation in which it sad its potential liquidation would very likely result in very minimal recovery for the lenders and noteholders, if at all.

Nam Cheong said it was in need of additional working capital and it needed to conserve its cash reserve for operational purposes. As such, the company said it would not be able to make principal repayment in the near future.

Offshore Energy Today Staff