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Vallianz enters agreements with Swiber, Rawabi to restructure US$139m in net payables, shareholder's advances

OFFSHORE support vessel provider Vallianz Holdings Limited has entered into separate set-off and settlement agreements (SOSAs) with Swiber Holdings Limited and Rawabi Holding Company Limited to restructure net payables and shareholder's advances of up to US$138.7 million.

Swiber, which holds a 20.9 per cent stake in Vallianz, had on Oct 13, 2016 notified the group of its interest to participate in the renounceable non-underwritten rights cum warrants issue proposed by Vallianz on Sept 6, 2016.

Following discussions with Swiber, both parties have entered into an agreement to convert net payables to Swiber of US$36.6 million into shares in Vallianz's capital through the proposed rights cum warrants issue, upon the fulfilment of certain conditions.

Any balance net payables to Swiber following the latter's subscription of any rights shares with warrants and any exercise of these warrants will be settled through further new equity in the future.

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Rawabi, which now owns 15.6 per cent stake in Vallianz, has also agreed to convert its shareholder's advances of US$102.1 million to Vallianz into equity through the proposed rights cum warrants issue, and to subscribe for any excess rights in the issuance. Any balance shareholder's advances owing to Rawabi following the rights issue and exercise of the warrants will be settled via further new equity in the foreseeable future.

The proposed conversion of the shareholder's advances could result in Rawabi becoming the largest single shareholder of Vallianz.

Vallianz CEO Ling Yong Wah noted that the signing of the SOSA with Swiber represents "a critical step in the restructuring efforts" of the group.

"It provides clarity on the intention of both parties to move forward with a planned resolution on the net payables issue. Rawabi continues to demonstrate its strong support through the intention to significantly raise its shareholding in Vallianz," he said.

"By fulfilling the group's financial obligations towards Rawabi and Swiber using equity, we will be able to conserve our cash resources for working capital and strengthen the group's equity base," Mr Ling added.