SINGAPORE – Upstream oil and gas firm KrisEnergy said on Tuesday (Oct 22) it has decided not to pay out the redemption amounts under its notes, as the debt-laden group needs to conserve cash while it works on a restructuring proposal.
These redemption amounts comprise the principal and interest payable for both the $130 million 4 per cent senior unsecured notes due 2022 and the $200 million 4 per cent senior unsecured notes due 2023, as well as the principal payable under the $139.5 million senior secured zero-coupon notes due 2024.
No payment will be made even when redemption event(s) have occurred under the notes and if any completed exercise notice has been submitted.
KrisEnergy is under court protection from legal action by creditors in Singapore. Its three-month debt moratorium, which lasts till Nov 14, was granted in September.
Besides the notes, its other existing debt agreements comprise a US$200 million revolving credit facility (RCF) with DBS Bank maturing on June 30, 2020, a term loan from HSBC, and a term loan from Standard Chartered Bank, Singapore Branch (SCB).
Total debt stood at around US$558.8 million (S$760.7 million) as at June 30, according to KrisEnergy’s presentation slides for its Sept 10 informal investor meeting for noteholders and shareholders.
In August, KrisEnergy said it will temporarily stop repaying the principal and interest under the HSBC and SCB term loans, amounting to US$4.6 million due on Aug 21. It also paused the repayment of interest under the due-2023 notes, amounting to S$4.1 million due on Aug 22.
The debt-laden firm reiterated on Tuesday that given the group’s financial condition, it is not feasible to make all payments of its financial obligations as they fall due.
KrisEnergy said on Tuesday it is working closely with its advisers to conserve all available cash to meet the group’s funding requirements during the restructuring period to protect the interest of all stakeholders while a restructuring proposal is in the works.
On Oct 18, KrisEnergy appointed a non-executive independent director, Bernard Castanet, and also reshuffled its board committees. Before that, non-executive independent director Duane Radtke had stepped down from the board on Sept 30.
Keppel Corporation, a creditor and shareholder of KrisEnergy, had publicly expressed support for KrisEnergy’s management in formulating a restructuring plan. Separately, Keppel Corp has been announced as the target of Temasek’s planned bid for a controlling stake, in a S$4.08 billion deal which will involve a strategic review of Keppel’s operations including the offshore and marine segment.