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KrisEnergy's DBS revolving credit facility now due on Dec 31
DEBT-LADEN KrisEnergy on Tuesday night said DBS Bank has agreed to extend the maturity of its revolving credit facility (RCF) again, this time by six months to Dec 31, 2020.
DBS is the sole arranger of the facility, while Keppel Corp holds an indirect interest and the key economic risk in the facility through a bilateral contract with the bank.
In conjunction with the RCF’s new maturity date, Keppel on Tuesday also entered into an agreement with DBS to extend the term of their bilateral contract for the same period.
This is to “facilitate a consensual restructuring and to support KrisEnergy’s management whilst they discuss and obtain feedback from stakeholders on its debt restructuring plan”, Keppel said in a separate filing.
The conglomerate reiterated that it reserves the right to evaluate the upstream oil and gas company’s debt restructuring plan, and to approve or reject the plan as Keppel deems fit in its best interests.
About US$177.3 million in outstanding principal is owed under the DBS RCF as at Tuesday, according to Keppel’s announcement. KrisEnergy is one of the guarantors, and its wholly-owned subsidiary KrisEnergy (Asia) (KE Asia) is the borrower.
The RCF, and consequently Keppel’s economic exposure in respect of the same, benefits from a comprehensive first-ranking security package over the assets of the KrisEnergy group.
KrisEnergy’s bourse filing on March 29, 2018 stated that the RCF is secured by producing assets in the Gulf of Thailand and in Bangladesh, as well as development assets in the Gulf of Thailand and in Indonesia.
Keppel on Tuesday said it will not be required to make any payment to DBS under the bilateral contract, based on Keppel’s financial adviser’s analysis of the KrisEnergy group’s assets and operations, as well as a range of outcomes for the proposed restructuring.
The bilateral contract was required for DBS to provide the RCF to KE Asia. Keppel also benefits from interest payments made to the bank under the facility.
The lender previously extended the RCF maturity by two years to June 30, 2020, according to KrisEnergy’s filing in March 2018.
Last August, KrisEnergy first filed for court protection from creditors’ legal action while it formulated a debt restructuring plan. Keppel publicly came out to support the application.
As at Dec 31, 2019, KrisEnergy had some US$503 million in borrowings and debt securities, including zero-coupon notes, the DBS RCF, notes maturing in 2022 and 2023, as well as two unsecured term loans from HSBC and Standard Chartered Bank.
Keppel shares ended Tuesday at S$5.96, up S$0.01 or 0.2 per cent.