All eyes on Nam Cheong's revamp

THE troubled offshore and marine (O&M) sector has seen another company, Malaysian shipbuilder Nam Cheong, proposing a restructuring plan.

How its restructuring pans out will be highly watched as Nam Cheong and another company, Marco Polo Marine, represent the first test-cases under an updated legal regime in Singapore's still-nascent restructuring sector.

The legal aspects aside, Nam Cheong will face an uphill task in convincing bondholders that they are not given the short end of the stick and that its projections are not overly optimistic.

Singapore in May revised its restructuring and insolvency laws, improving the legal framework for undertaking major debt restructuring.

In particular, it incorporated several features of the US bankrupcy code. These include automatic worldwide moratorium for 30 days on debt collection efforts when the company applies for a scheme of arrangement, as well as a mechanism, known as "cram-down", permitting the court's approval of schemes of arrangement over a class of d…