KS Energy says OCBC's demand is for guarantee of US$150m under unit's term loan, S$5m bridging loan

OFFSHORE and marine firm KS Energy has clarified that a demand from OCBC Bank to the company for a term loan owed by its 80.09 per cent-owned subsidiary KS Drilling (KSDL) is for less than US$230 million, and that the term loan is secured by various assets.

KSDL's liability under the term loan is secured by securities including mortgages over certain of KSDL's jack-up and land rigs in favour of OCBC, mainboard-listed KS Energy said in a filing to the Singapore Exchange on Monday night. The bridging loan is unsecured.

This follows KS Energy's announcement last Wednesday that the bank had sent letters of demand to KS Energy, KSDL and six other subsidiaries of KSDL, seeking repayment of KSDL loans.

KSDL owed the bank a term loan totalling about US$230.7 million and a bridging loan of nearly S$5.2 million, while one of its subsidiaries also owed OCBC a bridging loan of about S$5.2 million.

KS Energy on Monday said the demands it received from OCBC are for guarantees it allegedly gave for US$150 million of KSDL's term loan, and S$5 million for the bridging loan. OCBC demanded payments within seven days and could wind up the company within six months if the payments are not made.

KS Energy said: "The company is presently seeking legal advice and will engage OCBC to remedy the situation, and to advance the interests of all stakeholders." It added that it will keep shareholders informed on material developments, and advises shareholders to exercise caution in the trading of its shares.

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Indonesian tycoon Kris Wiluan, who is facing 112 charges for alleged market rigging and false trading, last week resigned as chairman, chief executive officer (CEO) and director of KS Energy. His son, Richard James Wiluan, has replaced him as chairman and CEO of KS Energy and has also taken on the position of KSDL chairman.

Shares in KS Energy, which are suspended, last traded on Aug 7 at 1.3 Singapore cents.