Holders of Pacific Radiance’s SGD 100m ($75.7m) bonds due mature later this year are set to meet on Monday to vote on restructuring proposals.
Noteholders are being asked to vote on two resolutions; one is a proposal for a debt to equity swap where noteholders will get 19 shares for every SGD 5 held, or the equivalent of 26.3 cents per share.
The second resolution is to waive potential events of default and covenants that may be breached so that monies in an escrow account can be used to make a coupon payment due in March 2018.
However, the consent solicitation exercise has drawn criticism. Bondholders have said they will lose their seniority protections should they become shareholders.
OCBC credit analyst Nick Wong has advised noteholders to reject the debt-to-equity conversion resolution, saying other aspects of the restructuring, such as further rights issues or warrants, are still unclear.
Investor lobby group Securities Investors Association (Singapore) (SIAS) held an informal meeting for bondholders on Friday.
SIAS said investors needed to make “informed decisions” with respect to their note-holdings and understand the situation facing the company in the current oil and gas crisis.
“While many noteholders did not expect to be in the current predicament, nevertheless, it is imperative that noteholders understand the impact of their decisions on that company and stakeholders while it negotiates with the major creditors,” it said.
Last Tuesday, the Singapore Exchange (SGX) granted Pacific Radiance an extension of up to 2 July to release its full-year and first quarter results.
The company will also have until 16 July to hold its annual general meeting (AGM).
Pacific Radiance said that it expected discussion of its restructuring terms with potential investors, existing lenders and bond holders will need more time to reach a conclusion.
“Release of financial results prior to the conclusion of the main terms of the restructuring may potentially reflect incomplete information,” it said.
“An extension will allow the group to release its financial results after the main terms of the restructuring are finalized…enabling the market to better assess the financial impact of the restructuring.”
