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Pacific Radiance spells out restructuring plan for new US$120m capital injection

OFFSHORE marine operator Pacific Radiance shed light on a restructuring proposal that could usher in US$120 million of investment from potential investors by way of subscription of new ordinary shares.

The new shares will constitute up to 65 per cent of the enlarged shareholding of the post-restructuring group, it said on Friday.

Under the restructuring plan, the existing financial obligations owing to the bank lenders, except for the existing property mortgage loan, will be re-profiled based on the valuation and income-generating ability of the existing security assets assessed by the potential investors.

Some US$100 million of the aggregate re-profiled bank loans shall be repaid and an equivalent amount of about US$100 million will be forgiven once the restructuring becomes effective.

The remaining re-profiled bank loans of about US$120 million will be repaid over three years from Jan 1, 2021 to Dec 31, 2023.

Half of the contractual interest margin payable under the re-profiled bank loans shall be deferred for a period of three years from Jan 1, 2018 to Dec 31, 2020 and the deferred interests shall be paid by Dec 31, 2023.

The existing mortgage loan shall be repaid based on the existing repayment schedule from Jan 1, 2021 but the terms of interest repayment shall be the same as that of the re-profiled bank loans. The unsecured portion of the bank loans will be restructured together with the other unsecured liabilities.

As for the unsecured creditors (excluding the noteholders in respect of their outstanding debt which is unsecured, professional advisors, suppliers and vendors), they will receive new shares that represent their outstanding debt.

The unsecured debt of the noteholders will be restructured via consent solicitation exercises among the noteholders.

Pacific Radiance's Board said that it believes the restructuring proposal, if implemented by way of schemes of arrangement, will put the group back on even keel, ensuring the business sustainability under the current distressed market and positioning it for the eventual recovery of the sector.

Trading of Pacific Radiance shares has been voluntarily suspended since Feb 28.

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