Pacific International Lines' debt restructuring plan approved by creditors

CREDITORS of privately-held Pacific International Lines (PIL) have helped the insolvent boxship operator keep liquidation at bay when a significant majority of them on Feb 1 voted in favour of its debt restructuring plan bankrolled by heavyweight investor Temasek Holdings' wholly-owned Heliconia Capital Management.

After the plan is sanctioned by the court, Heliconia will become the majority shareholder in PIL while the stakes held by the family of executive chairman Teo Siong Seng will be diluted to under 15 per cent.

PIL's creditors approved the scheme of arrangement by a simple majority (above 50 per cent) in number representing at least 75 per cent in value of each class of creditors present and voting at the meeting, PIL said in a regulatory statement on Monday night.

All the creditors are now on board for the rescue deal that will see Heliconia pump in US$600 million and which had earlier been described by PIL as its last resort and best offer.

The creditors comprise the holders of the S$60 million tranche of 8.5 per cent notes overdue since last November and other unsecured claimants as well as secured lenders.

PIL will be applying to the High Court for it to sanction the scheme, with a court hearing expected to be held later this month or in March. The debt restructuring exercise is expected to be completed by the first half of 2021.

Mr Teo said in the statement: "The comprehensive financing package offered by our investor, in conjunction with a holistic restructuring of PIL's financial liabilities, will recalibrate PIL's capital structure for long-term sustainability, thereby allowing PIL to emerge as a stronger, leaner and better capitalised company, and one that will provide creditors with a clear path to recovery going forward."