Lender Keppel Corp extends KrisEnergy restructuring deadline to end-November

KEPPEL Corp's Kepinvest Singapore has agreed to a further US$10.8 million drawdown on its April credit-facility agreement with KrisEnergy subsidiaries, the board of the troubled upstream oil-and-gas group said on Wednesday evening.

Kepinvest has also extended the deadline for KrisEnergy's debt restructuring again. The exercise must now be completed by Nov 30 - after earlier deadlines of Sept 30 and July 15 were extended - as Keppel Corp said it hopes for a successful conclusion "in the next few months".

The failure to complete the restructuring is a mandatory pre-payment event under the facility agreement. Any drawdown of the "Facility B" second tranche, which covers up to US$57 million, is at the sole discretion of lender Kepinvest until the debt restructuring is done.

Facility A - the first tranche of the US$87 million credit facility agreement - has already been fully drawn down. The credit facility funds KrisEnergy's development project of offshore oil-and-gas asset Cambodia Block A (CBA) in the Gulf of Thailand.

Keppel Corp added in its own bourse filing that the move was to support KrisEnergy, preserve the CBA asset and give KrisEnergy time to deliver its debt restructuring plan.

The second tranche drawdown was needed "to maintain the current development schedule for first oil and avoid any adverse consequences associated with not achieving first oil production by Dec 31, 2020, which could include the termination of the concession rights to develop the asset", Keppel Corp noted.

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On its part, the KrisEnergy board described CBA as being key to the group's planned restructuring, as well as an asset tipped to become the highest revenue contributor and "materially increase the group's revenue and cash flow" once oil production begins.

Separately, KrisEnergy has received the retention sum of US$1.7 million from the sale of its 30 per cent stake in the Andaman II production-sharing contract. The funds will go towards the repayment of the company's revolving credit facility with DBS, it said.

Keppel Corp closed at S$4.16, up by S$0.04 or 0.97 per cent, before the latest announcement. Trading in KrisEnergy shares has been suspended since August 2019.