ASL Marine seeks to issue shares as Singapore bond strains mount

[HONG KONG] ASL Marine Holdings Ltd. on Friday proposed to raise S$25 million by offering stock to existing shareholders and said it may seek additional loans to repay Singapore dollar notes due in March next year, as stresses within the local bond market mount.

The Singapore-listed company, which started operations as a trader of scrapped steel material in 1974 and operates a shipyard in Batam in Indonesia, added that it "believes that its bankers will continue to support the company and grant the company's request for the additional facility loans".

It also said that it's of the view that the net proceeds raised from the rights issue "will be sufficient to meet the present funding requirements".

More firms in the city-state's shipping and oil and gas services industries are facing difficulty meeting debt obligations amid weakening economic growth.

Container throughput in Singapore shrank 8.7 per cent in 2015 as global trade slowed, and strains in the city's oil and gas sector are mounting as firms struggle to repay borrowings.

Swissco Holdings Ltd, which supplies rigs and support vessels to oil and gas explorers, on Friday received a notice from its notes trustee stating that a potential event of default has occurred due to the company's failure to pay interest due in October.

Singapore-based shipping trust Rickmers Maritime said last week that it received a letter from lawyers representing some investors that are seeking to enforce repayment.

ASL Marine's S$100 million bonds maturing in Mar 2017 have slumped 22 cents since the Jun 1 to 70 cents on the Singapore dollar on Monday, the lowest since the bond was sold in 2013, according to DBS Group Holdings Ltd prices.

The company had S$21.6 million of cash and cash equivalents as of Jun 30 and S$592.2 million of total debt repayable, according to a previous filing.

ASL Marine's managing director Ang Kok Tian couldn't be reached when a call was placed to his office.

BLOOMBERG