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Falcon Energy to undertake complete debt revamp, suspends trading

OFFSHORE and marine company Falcon Energy Group announced during midday trading break on Friday that it will suspend coupon payment on notes due on Jan 19 as it embarks on a complete debt overhaul. The mainboard-listed company in filings with the Singapore Exchange also requested trading in its shares to be suspended.

Falcon blamed the moves on the prolonged slump in the oil services market and the need to conserve liquidity for business operations. It said the company will embark on a complete restructuring of all its liabilities "which will include our bankers, noteholders and other unsecured creditors".

Discussions with different stakeholders are currently ongoing, it added.

Falcon said it intends to propose a certain amount of conversion of its S$50 million notes due on Sept 19, 2017, to ordinary equity in the company and a meeting will be convened shortly to discuss further steps and the restructuring of the notes.

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The company is also in the process of discussing a restructuring of term loans with its bankers, said Falcon. "It is our intention to adopt a similar cash conservation position moving forward," it added.

On its voluntary trading suspension, Falcon said it will seek its lifting "as soon as it is appropriate to do so without compromising the interests of all stakeholder groups".

In a letter to shareholders on Friday, Falcon's chairman and CEO Tan Pong Tyea said: "We believe the industry is starting to show signs of improvement and our business model is viable, supported by our highly experienced management team with proven track record. We are confident Falcon Energy will emerge an even stronger entity post-restructuring." 

Falcon shares last traded up 0.1 Singapore cent, or 3.85 per cent, at S$0.027 before the midday break on Friday.