ASL Marine calls for informal meeting with note holders as shipbuilding gloom drags on

SHIPBUILDER and vessel charterer ASL Marine will host informal meetings with holders of its outstanding medium-term notes on Sept 18, it said on Friday.

Its S$95 million outstanding series 006 notes and S$47.5 million series 007 notes, which are traded over the counter, both had a last ask price of 55 Singapore cents to the dollar as at Friday.

In a letter to note holders published on Friday night, chairman Christopher Chong said that the group's recovery from the business down cycle is taking longer than expected.

Mr Chong wrote: "I have therefore suggested... that we should call an informal meeting to update you on the business climate and financial performance of the group, as well as our ongoing discussions with the principal bankers on possible additional working capital lines."

The group requires revolving credit facilities and trade lines from the lenders in order to do more ship repair work, he said: "In light of the slower than expected recovery in the shipbuilding segment, the group has progressively shifted its focus to the shiprepair segment. There is an increase in ship repair projects as many upstream players are readying their vessels for deployment opportunities."

Mr Chong said that the last year had been a trying one for ASL Marine: "While the market seems to have stabilised, it has yet to recover fully from the industry downturn... Management does not foresee the shipbuilding segment to improve significantly in the next 12 months."

The group's revenue fell 18 per cent in the 12 months ended June 30 to S$280.5 million. While shipchartering and shiprepair revenues rose, recovery in the shipbuilding segment remains slow with only S$54.9 million revenue generated in the year. The group reported a full-year net loss of S$69.89 million, narrowing 2.5 per cent from a S$71.7 million net loss in the prior year.

Management has also been unable to execute its asset disposal plans due to the oversupply of offshore support vessels (OSVs) in the market which has resulted in a depressed pricing, Mr Chong said.

RSM Corporate Advisory, which has handled a number of debt and bond restructurings, is handling the informal meetings.

Shares of ASL Marine fell 4 per cent of 0.3 Singapore cent to S$0.072 on Friday before the announcement was made.