KrisEnergy board passed up potential lifeline: source

EVEN as it was struggling through a restructuring in 2016, upstream oil and gas company KrisEnergy had been in discussions at the time about an offer for some of its assets. But it appears that the board was unable to reach agreeable terms with the offeror.

According to documents seen by The Business Times (BT), a privately held company called AlHassan International Holdings had in 2016 proposed to pay KrisEnergy US$230 million for its stakes in several oil fields. AlHassan also wanted to buy Keppel Corporation's 40 per cent stake in KrisEnergy.

The documents suggest that AlHassan had been in negotiations with Jeffrey MacDonald, KrisEnergy's interim chief executive officer at the time, and Keppel Corp's chief financial officer Chan Hon Chew.

After some negotiations, AlHassan eventually offered US$165 million for stakes in three blocks and a production barge. The offer was never announced as it was still subject to the approval of KrisEnergy's directors as well as regulatory approvals.

A source told BT that sale and purchase agreements were drafted but not signed, as the various parties could not agree on the terms.

When approached by BT for comment, KrisEnergy referred the matter to Keppel. A Keppel spokesperson merely said: "KrisEnergy has just published its final restructuring proposal. Keppel Corporation is currently evaluating the restructuring proposal and will make the appropriate announcements later."

AlHassan did not respond to queries from BT.

The source said accepting the offer could have prevented KrisEnergy from ending up in its current position.

KrisEnergy is trying to restructure debt of US$476.8 million. A debt moratorium it received in September last year has already been extended three times.

The company's third informal investor meeting with its noteholders, shareholders and warrantholders is scheduled to take place today at 6.30pm.

Under the proposed restructuring plan, KrisEnergy shareholders will be diluted to 10 per cent of post-restructuring equity. All unsecured debt will be converted into 46.2 per cent of post-restructuring equity. Secured creditors will see their debt extended, with some also having a portion of their debt converted to equity.