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Keppel-linked Floatel reaches agreement with lenders for full discharge of some assets
KEPPEL Corporation said that offshore vessel player Floatel has reached an agreement with lenders of its revolving credit facilities and bank vessel facility, which will deliver a full discharge of security over the assets owned by some of the Floatel group entities.
The agreement is conditional upon securing and satisfying all conditions precedent to a new revolving credit facility, which will be drawn in part to fund a settlement payment of US$46 million to the lenders.
Upon completion of the agreement, which is expected to occur in February, the vessel Floatel Endurance will remain with the Floatel group.
Cash in the blocked accounts and other assets retained by the relevant company in the group, and any and all claims of the lenders against the group - including the US$115 million owed under the bank vessel facility and the revolving credit facilities - will be fully and unconditionally released.
The agreement was approved by a significant majority of Floatel's shareholders and the first-lien (1L) and second-lien (2L) bondholders that are party to the lock-up agreement.
Floatel is 49.92 per cent-owned by FELS Offshore, a wholly owned unit of Keppel Corp. FELS Offshore on Dec 5, 2020 entered into a lock-up agreement for a proposed restructuring of Floatel.
The agreement includes an ad hoc group (AHG) of holders of US$400 million worth of Floatel's 9 per cent senior secured 1L bonds, as well as other consenting 1L bondholders.
The lock-up agreement will commit Floatel, Keppel, the AHG and any acceding 1L bondholders or holders of the US$75 million worth of Floatel's 12.75 per cent 2L bonds to attempt a financial and corporate restructuring of Floatel.
The restructuring is expected to involve a new entity acquiring certain subsidiaries of Floatel that own and operate vessels.
Shares in Keppel Corp ended trading at S$5.63 on Friday, up S$0.10 or 1.81 per cent.