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Pacific Radiance offers noteholders debt-to-equity swap, two coupon payments
OFFSHORE marine services firm Pacific Radiance has tabled a proposal for noteholders in its bid to restructure its S$100 million medium-term notes.
The notes, which have an interest of 4.3 per cent, are due for maturity on Aug 29 this year.
The terms of the proposal include a full conversion of the S$100 million notes to new equity - at three shares for every S$1, with no lock-up period.
This works out to about 0.33 Singapore cent for each new share.
In its presentation to noteholders at their second informal meeting on Friday, Pacific Radiance said it will issue a total of 300 million new shares worth S$36 million, based on the stock's last closing price on Jan 18 of 11.9 Singapore cents per share.
The firm will also release S$4.3 million, representing two coupon payments, from the escrow account, once it obtains shareholders' approval.
The proposal includes a waiver of financial covenants, other covenants/conditions and other events of default.
Noteholders have the option to liquidate their shares on the market, or hold the shares to "participate in future equity exercise and recovery", said Pacific Radiance.
The company plans to launch a consent solicitation exercise on Feb 26 to convert the notes into shares as part of the financial restructuring.
For the proposal to go through, two or more noteholders holding 75 per cent of the principal amount of the notes must give their approval. At least 75 per cent of the noteholders present at the meeting must also vote in favour.
It will also launch a consent solicitation exercise on the same day to facilitate the release of the monies in the escrow account to meet the coupon due on Mar 1.
Pacific Radiance said in the presentation that "the management believes the market is at its inflection point and the business is viable in the long run".
Employees across the company are now doing more work with lesser resources and are exploring every avenue to cut cost without losing quality, while the management team has taken a substantial cut in remuneration to tide the group over this period, it said.
"Post-restructuring, with the blessing of all stakeholders, the management envisages itself to emerge as an even stronger entity well poised to ride on the upcoming market recovery," it said.
The group said it plans to diversify beyond oil price-related services and into offshore wind industry.
Pacific Radiance had requested for a trading halt on its shares on Friday afternoon. The stock last traded at 11.9 Singapore cents on Jan 18.