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Keppel in talks with KrisEnergy, supports proposed financial restructuring
KEPPEL Corporation is in talks with oil and gas exploration and production firm KrisEnergy to subscribe for the latter's notes with warrants, and for all the excess notes with warrants that are not successfully subscribed for.
Detailing these in a filing to the Singapore Exchange after markets closed on Friday, Keppel lent its support to KrisEnergy's proposed terms of the restructuring of its notes.
Through its wholly-owned indirect subsidiary, Keppel Oil & Gas Pte Ltd, Keppel is currently in discussions with KrisEnergy to "subscribe for its pro-rata entitlement of the notes with warrants, and subscribe for all the excess notes with warrants that are not successfully subscribed for by the other shareholders of KrisEnergy," it said.
Keppel also noted that KrisEnergy had stated the proposed restructuring offers the only option available for KrisEnergy to preserve value for all stakeholders. If it does not get the go-ahead from noteholders, "KrisEnergy will face the risk of default on the Existing Notes and may be in default on all or substantially all of its other existing indebtedness."
"As its shareholder, Keppel Corporation supports the position taken by KrisEnergy," said Keppel.
This comes a day after KrisEnergy said that it has sought the feedback of noteholders before the consent solicitation exercise was launched, and taken into account their views. The company has implemented suggestions where possible, such as adding an oil price-linked coupon.
A group of KrisEnergy's noteholders are demanding higher coupon rates and a shorter extension period, and also asking the company to commit itself to a more restrained and disciplined capital expenditure programme.
KrisEnergy said that it is aware of certain views expressed regarding the financial restructuring process. It added that the terms and conditions of the consent solicitation exercise are final.