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Pacific Radiance in 'advanced discussions' for US$180m debt funding
OFFSHORE marine services firm Pacific Radiance on Thursday said it is in "advanced discussions" with debt funders for at least US$180 million of debt funding or higher.
As part of repayment, the group will issue new company shares and/or warrants to the financier, who will own up to 15 per cent of the company's enlarged share capital.
Pacific Radiance is also planning to raise additional equity through a share placement with equity investors, with the plans for debt funding and equity subscription forming a part of the company's debt restructuring plan, it added.
The new debt and new equity will be used to finance the group's proposed US$180 million acquisition of Allianz Marine and Logistics Services Holding (AMLS) and its subsidiaries and associated companies.
AMLS is an Abu Dhabi-headquartered holding company incorporated in the United Arab Emirates (UAE) of some 22 subsidiaries and associated companies. It is in the business of integrated offshore logistics solutions and supply-based operations to the offshore oil and gas and construction sectors, with operations covering the Gulf Cooperation Council region, India and Egypt.
The vendors selling their stakes in AMLS include Ahmed Tarek Khalil Ali (ATK), a businessman in UAE who owns a 74.44 per cent stake, and AMLS founder Murali Krishna Krishna Kumar, who owns a 22.06 per cent stake.
Other vendors include Friedrich Portner, a general manager at AMLS operating subsidiary Allianz Gulf Oil Fields Services who owns 1.5 per cent, and AMLS employees Ramy Mohamed Rashad, a key account director who owns 0.5 per cent, John Garbutt, a logistics director who owns 1 per cent, and Karim Hasabelnabi Mohamed, an operations manager who owns 0.5 per cent.
Under the agreement, Mr ATK, existing controlling shareholders as a group, and the financier will be entitled to nominate and appoint the same number of directors to Pacific Radiance's board.
As Mr ATK will hold more than 30 per cent of the enlarged voting share capital of Pacific Radiance upon the acquisition's completion, he will be required to make a general offer for shares not already owned.
The equity subscription will be subject to a whitewash resolution having been passed by the company's shareholders who are independent of Mr ATK and his concert parties at an extraordinary general meeting and shareholder approval for the share issue.
It is also conditional to the Singapore Exchange (SGX) issuing an approval-in-principle regarding the listing and quotation of the new shares.
Pacific Radiance added that an independent financial adviser has been appointed to advise on whether or not the whitewash resolution is fair and reasonable, and not prejudicial to the interests of independent shareholders.
The company said that its board believes the proposed acquisition would "create meaningful synergies" between the group and AMLS, and enhance shareholder value due to the provision of complementary services.
This will apply to their combined customer base, and allow sharing of global marketing and sales channels, technologies and management expertise. This comes along aims to expand the group's business and strengthen its foothold globally as it plans to combine its business with that of AMLS.
An independent valuer will also be appointed to conduct and furnish a valuation report on AMLS.
In addition, the new debt and new equity will also help repay existing debts – including its notes restructuring, and general corporate and working purposes.
The debt restructuring plan, meanwhile, will involve the full settlement of Pacific Radiance's bank debt via a cash payment of about US$175.6 million. It will be implemented by way of scheme of arrangement to be proposed between the relevant group entities and their creditors.
Due to the new developments, the Singapore High Court has granted an extension of the existing moratoria to Sept 5. The group plans to seek further extension of said moratoria and seek approval in a consent solicitation exercise to extend the final maturity date of its S$100 million 4.3 per cent notes due 2019.
Trading of the company's shares has been voluntarily suspended since Feb 28 last year.