SEAFOOD supply chain manager Oceanus Group said on Thursday it has signed a binding term sheet with two of three of its key creditors for a proposed debt restructuring, which may greatly reduce Oceanus's total outstanding debt balance.
The total debt balance, including accrued interest, held under the two key creditors, Ocean Wonder International and BW Investment, amounts to S$71.85 million, representing 82.8 per cent of Oceanus's outstanding debts.
Both parties have agreed that S$54.2 million of this balance will be converted into new Oceanus shares at a conversion price ranging between S$0.003 and S$0.02167 per share.
Similarly, some S$7.23 million of outstanding debt to Ocean King Group (OKG), the third key creditor which has not signed a binding term sheet for the proposed restructuring, will be converted into new Oceanus shares at the same conversion price range.
Oceanus's executive director and CEO, Peter Koh, said: "This is a big step forward for Oceanus in our tireless efforts to clean up the Group's books over the past year. . . We are still in active negotiations with OKG, and hope to obtain the same support from them, which will allow us to start a new chapter on a clean slate."
After the proposed restructuring, should OKG agree on the terms, Oceanus's remaining debt under its three key creditors will decrease from S$81.43 million, representing 93.8 per cent of Oceanus's total debt balance (including accrued interest), to approximately S$20 million.
Ocean Wonder International and BW Investment have also agreed to extend the termination date of the respective loan agreements from December 2016 to December 2018, and interest will cease to accrue from July 2016.
To aid the group's cash-flow needs in the meantime, BW Investment and Mr Koh have also committed to contribute S$250,000 and S$500,000 respectively to pay professional advisers' fees for the restructuring and to meet the group's operational costs.
After that, the group plans to engage new investors and management to subscribe for new shares at a subscription price to be agreed.
The counter finished flat at S$0.003 on Thursday.