Nam Cheong's creditors to withhold proceedings against its unit

MALAYSIAN offshore support vessel builder Nam Cheong on Thursday said that following an application by its wholly owned subsidiary, Nam Cheong Dockyard (NCD) to the Corporate Debt Restructuring Committee of Malaysia (CDRC), NCD's financial institution creditors are expected to withhold from any proceedings against NCD and its subsidiaries.

This is part of an informal standstill that will last for an initial six-month period, said the company in a regulatory update.

Meanwhile, NCD is expected to submit a proposal for a restructuring of its debts within 60 days from the date of CDRC's admission, after which CDRC will call for a meeting with NCD's creditors.

The company is hopeful of being able to get back to the term loan creditors and all other creditors in the near future with some indication of its plans which must ensure underlying viability and the generation of sufficient earnings before interest, taxes, depreciation, and amortisation (Ebitda) to meet its obligations, said Nam Cheong.

However, the group has yet to enter any definitive agreement in relation to the restructuring. In the event that restructuring is not completed in a timely manner, the company will be faced with a going concern issue, said Nam Cheong.

Nam Cheong has voluntarily suspended trading of its shares since April 2018.