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Ezion lays out refinancing terms for S$575m notes, perpetuals
EZION Holdings before trading hours on Tuesday, sought support from security holders towards pushing out principal redemption for notes and cutting coupon rates on notes and perpetuals (see amendment note) totalling S$575 million in principal values.
The refinancing of Ezion's securities is a condition laid out by its senior lenders for a six-year refinancing plan for over US$1 billion of loans on its books plus the extension of an additional working capital line of up to US$100 million. The Business Times has confirmed that seven senior lenders - DBS Bank, OCBC Bank, UOB Bank, Maybank, CIMB, RHB and Caterpillar Finance - account for some US$1 billion loans on the company's books.
Ezion also added that it has one strategic investor interested to work with the company but would like to see the refinancing of its debts and medium term notes completed first.
The company claimed the proposed refinancing terms for holders of Series 3 to 7 notes and Series 8 perpetuals come with "no haircuts".
It is tabling two options each for holders of notes and perpetuals. All four options on the table call for coupon rates to reduce to 0.25 per cent per annum compared to rates of between 4.6 per cent and 7 per cent now attached to these securities. With either of these four options, holders of these securities will also stand to redeem the principal values in full.
Holders of Series 3 to 7 notes have two options. The first option involving pushing out maturity of the notes principal by seven years, comes with a 5 per cent redemption premium, which is not extended under the second option. With the second option, noteholders will enjoy the rights within the first five years, to convert notes to shares in tranches of S$50,000 in exchange for extending principal redemption by six more years.
Perpetual holders also get to choose between two options. The first, which offers a 5 per cent redemption premium, will also see the perpetuals converted to bonds with a tenure of 10 years. The second will see the perpetuals converted into equity on the same terms offered to noteholders but within the first three years. (see amendment note)
Ezion said that it has about US$2 billion of total liabilities, up from over US$1.5 billion as at the end of first half of FY17. Medium term notes make up US$507.6 million of these liabilities.
It maintained that its liftboat and service-rig focused business remains viable though some positive operating cash flows of US$170 million for the last 18 months were insufficient to meet the financial obligations to lenders and capital expenditure.
It called on support from its debt-holders towards the refinancing plan tabled to "better match the group's cash flows".
Amendment Note: Ezion's refinancing plan for securities tabled for principal redemption for notes only to be pushed out and coupon rates for both notes and perpetuals to be reduced. The plan involved an option for perpetuals to be converted to bonds with a 10-year tenure. The article has been corrected to reflect these.