Mencast, FEG seek cash from asset deals

Singapore

TWO listed offshore and marine (O&M) counters, Mencast Holdings and Falcon Energy Group (FEG) are looking to seal asset deals in a bid to cash up to tide over a protracted industry downturn.

Mencast said after Thursday trading close that it is in early-stage exploratory discussions with unnamed parties over the divestment of its assets. It clarified that no definitive agreement or contract has been signed.

FEG said that it is looking to complete the sale and leaseback by Oct 2 of non-core assets, #15-19 and #22-14, 10 Anson Road, International Plaza.

Mencast's shares surged 2.9 Singapore cents or 17.7 per cent to S$0.193 before it entered into a trading halt.

FEG's shares closed up 2.9 Singapore cents or 67.44 per cent at S$0.072 on Thursday.

Like many active in the erstwhile thriving O&M sector, Mencast and FEG faced bottom-line challenges as contracting activity slowed drastically after a collapse in oil prices in 2014. FEG on Aug 11 issued a profit warning for Q4 and full-year FY17 as it looked set to raise asset impairments towards the financial year-end.

Mencast slipped deeper into the red in Q2 FY17 with a net loss of S$3.85 million, a reversal from a net profit of S$211,000 for a year-ago period.

Both companies have also tapped the Singapore dollar medium-term notes market for financing during better times, though they have managed to redeem the notes principal or bought extra time from noteholders.

Mencast secured loan and credit facilities of up to S$74.9 million from UOB that was used to repay S$5 million of outstanding bonds due on Sept 12, 2016.

FEG's noteholders granted the company the green light to extend by three more years the maturity of S$50 million notes due in September 2017.