Oceanus completes restructuring, proposes move to Catalist

Singapore

LOSS-MAKING abalone producer Oceanus Group is seeking to move from the Singapore Exchange (SGX) mainboard to the junior Catalist board and is in talks with a potential sponsor, it said on Thursday.

It announced this several hours after saying that it had completed the restructuring of about S$64.4 million of loans and almost three billion warrants, marking a significant step on its rocky road to recovery after the unnatural deaths of millions of its abalones three years ago.

The company, which does land-based aquaculture in China, has been in such dire financial straits that it admitted in June 2015 that it did not have enough money to pay auditors for its FY2014 accounts, adding that it would either have to seek more funds from investors or wait until its proposed restructuring was done before it could issue its 2014 annual report and hold its annual general meeting.

It said in a Singapore Exchange filing on Thursday after the market closed that moving to the Catalist board would give it a "more suitable platform" for the trading of its shares and better allow it to attract investors, adding that it was in talks with Stamford Corporate Services about becoming Oceanus' Catalist sponsor.

Oceanus' auditor, Foo Kon Tan Grant Thornton, had withheld its opinion in the company's 2013 annual report and raised questions about whether it could continue as a going concern, saying that this hinged on whether Oceanus could successfully issue loans and warrants.

Oceanus said in a separate filing early Thursday morning that it had managed to restructure its loan agreements with two major lenders - AIF Capital, an Asian private equity fund, and forensic accounting firm Borrelli Walsh. It also managed to amend the deals it inked with the two for them to subscribe to Oceanus warrants.

AIF Capital is the slightly bigger creditor - its amended agreements with Oceanus, made via its unit Ocean Wonder International, involve a loan principal of S$38.88 million and 1.79 billion warrants.

Oceanus' agreements with Borrelli Walsh's special purpose vehicle BW Investment involve a principal loan of S$25.5 million and 1.18 billion warrants.

Oceanus has been in the red since FY2012 after the mass demise of its abalone stock, and fired the management of its China farms in January 2014. It said in January this year that it intended to cut costs and boost revenue by buying full-grown abalone from sea farmers for redistribution rather than growing abalone itself.

Oceanus shares were flat at 0.8 Singapore cent on Thursday, far below the mainboard minimum trading price of S$0.20 per share.