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Holders of Ezion notes, perpetuals give approval for debt refinancing

HOLDERS of six series of notes and perpetuals have voted overwhelmingly in support of Ezion Holdings' proposal to push out maturity of and cut coupon rates on some S$575 million securities.

Ezion disclosed after trading closed on Monday that between 93.5 per cent and 98.82 per cent of holders of Series 3 to Series 7 notes and Series 8 perpetuals present at Monday's consent solicitation exercise voted in favour of its proposal.

The refinancing proposal called on holders of these securities to agree on slashing coupon rates to 0.25 per cent per annum from rates ranging between 4.6 per cent and 7 per cent.

Further to this, these stakeholders were offered two options that allow them to swap securities to shares in the company at a conversion price of S$0.2763.

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Ezion had also tabled two other options that allowed those holders of notes and perpetuals who do not wish to take up equity swaps to pick up Series A and Series C notes, respectively. Both series of notes come with a 5 per cent redemption premium; Series A's principal value matures in seven years while Series C notes have a 10-year tenor.

Holders of S$333 million of notes and S$119.5 million of perpetuals have elected or are deemed to have elected the options extending equity swap flexibility.

Conversely, holders of S$92 million of notes and S$30.5 million of perpetuals, have elected or are deemed to have elected for Series A and Series C non-convertible bonds, respectively.

Winning the thumbs-up from holders of these securities gives Ezion the clear to proceed with the refinancing of over US$1 billion in loans.

Like many cash-strapped, highly-leveraged offshore and marine (O&M) players, Ezion had struggled to meet its financial obligations to lenders and capital expenditure.

How far the listed company can ride through what is remaining of a protracted O&M downturn hinges on the success of its debt refinancing exercise.