Creditors grant nod for Nam Cheong's Singapore scheme

SCHEME creditors of offshore support vessel (OSV)-focused Nam Cheong on Wednesday gave the green light for the holding company to proceed with its debt restructuring plan.

Nam Cheong won a majority vote of 94.139 per cent of total value of the scheme creditors present and voting in person or by proxy at the court convened meeting of the Singapore-listed holding company.

This equates to a favourable vote from creditors representing US$338.7 million in value owed.

Just 5.811 per cent of or US$21.1 million in total value of scheme creditors represented at the court meeting voted against the scheme.

All institutional lenders of Nam Cheong's group of companies named in the Singapore's scheme - DBS, CIMB, Ambank, Maybank, RHB, Bank of China, Hong Leong and OCBC - were represented at Wednesday's court meeting.

These bank lenders accounted for US$159.29 million in estimated outstanding bank loans to the holding company and its subsidiaries and joint ventures.

The scheme creditors exercising their votes on Wednesday also include representation from holders of medium-term notes issued by the Singapore-listed holding company.

Nam Cheong has offered its scheme creditors a debt-to-equity conversion pegged at US$1 debt to 30 shares for non-sustainable portion of its unsecured debts. Its scheme creditors get to choose between two options for the sustainable portion, either converting into a seven-year term loan or cashing out at a recovery rate of between five US cents and 20 US cents for every US$1 sustainable debt held.

Wednesday's favourable vote paves the way for Nam Cheong to restructure under three schemes - two filed in Malaysia and one in Singapore.

Nam Cheong is seeking extra time from its scheme creditors to tide over a prolonged offshore and marine downturn that has damaged the fundamentals of its once-thriving build-to-stock OSV business.

The family of Tiong Su Kouk, as anchor shareholders in the holding company, has pledged RM50 million (S$16.8 million) in new equity injection. Some 30 per cent of this sum will fund the cash pay-outs to scheme creditors, with the other 70 per cent retained as working capital. Mr Tiong has deposited the pledged sum into an escrow account ahead of the scheme creditors' votes on this week.