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KS Energy in bonds purchase, warrants subscription agreements with lenders

KS Energy Ltd has proposed the issuance of S$80.15 million fixed-rate secured bonds due 2020 and some 80.15 million non-listed bonus warrants to OCBC, TAEL One Partners Ltd, Pacific One Energy Ltd (POEL) and Hedy Wiluan.

Ms Wiluan is the sister of Kris Wiluan, who is the executive chairman, CEO and controlling shareholder of KS Energy.

The separate bond purchase agreements and warrant subscription agreements were entered into with the lenders on Friday.

OCBC, POEL and Ms Wiluan are existing holders of S$45.0 million worth of convertible bonds due 2017 with 6 per cent coupon rate at a redemption price of 121.75 per cent of the principal amount. TAEL is an existing holder of S$7.5 million worth of convertible bonds due last year with a 6 per cent coupon rate at a redemption price of 104.19 per cent of the principal amount.

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As of Friday, there were also existing loans of US$3.29 million and S$8.62 million still owed by the group to POEL.

As a condition for the proposed bonds issue, KS Energy on Friday entered into bond repurchase agreements with each of the lenders to cancel those convertible bonds.

The payment for the proposed bonds issuance will thus be satisfied by the repurchase of the existing convertible bonds by KS Energy.

In addition, the group will convert the existing loans from POEL into bonds to be issued to POEL.

As for the bonus warrant, each warrant has an exercise price of 4.5 Singapore cents and carries the right to subscribe for one share in KS Energy. The completion of the proposed bonds issue shall be simultaneous with the completion of the proposed warrants issue, KS Energy said on Friday.

Assuming all proposed warrants are exercised, they will raise gross proceeds of S$3.61 million or net proceeds of S$3.59 million. KS Energy said it plans to use the net proceeds to fund debt repayments, and operating overheads.