IFR Asia – September 30, 2017

amounted to nearly S$5.3m at the close of
the offer last Thursday, representing 6.79%
of the outstanding notes.
AusGroup planned to issue an aggregate
of close to 91.6m new shares to the
noteholders that accepted the swap offer.
This represents 6.48% of the company’s
current issued share capital, and 6.08% of
the enlarged share capital. Settlement of
the exchange was last Friday.
The swap will result in an annual
reduction of around S$500,000 in interest
payments.
The Australia-based company had offered
in early September to exchange notes for
new shares at a rate equal to S$0.058 per
share, meaning one note would convert to
4,161,590 shares. This was the same price
per share as its earlier exchange offer, and
translated to a 21.8% premium over the
value-weighted average price on September
7.In an earlier exercise in June, offers to
exchange the bonds had amounted to
S$27.944m or 26.36% of the outstanding.
That left the outstanding bonds at

S$78.051m split between 324 notes of

S$240,900 each.

› MARCO POLO SETS VOTING DATES

Creditors of MARCO POLO MARINE and

subsidiary MARCO POLO SHIPYARD will vote

on the respective companies’ schemes of

arrangement on November 16.

The voting will be conducted under the

supervision of the Singapore High Court,

which earlier approved the companies’

applications to hold meetings to consider

the schemes of arrangement.

Marco Polo Marine will hold the meeting

during the morning session before the

subsidiary conducts its meeting in the

afternoon.

The Singapore-listed marine logistics

parent has not released any details on the

schemes. Among its creditors are holders

of its S$50m 5.75% bonds due 2019. Marco

Polo in April defaulted on a coupon

payment on the bonds.

Both companies have obtained approvals

for moratoriums on current proceedings

against them until November 30. This is an

extension from of an earlier moratorium

to August 30 under section 210(10) of the

Singapore’s Companies Act.

› EMAS GETS COURT MORATORIUM

The Singapore High Court has granted

a moratorium on actions against EMAS

OFFSHORE and subsidiary EMAS OFFSHORE

SERVICES as they work through their debt

restructuring.

Emas Offshore, a subsidiary of EZRA

HOLDINGS , and its subsidiary had applied to the

court to stop any resolution to wind up the

companies, any appointment of a receiver

or manager over any of their properties or

undertakings and any legal proceedings

against any properties or leases.

The High Court last Tuesday ordered

that no appointment shall be made of a

receiver or manager over any property or

undertaking of the two companies. Other

than with the approval of the court, no

legal proceedings or execution or legal

processes can commence against the

entities.

Emas Offshore and the subsidiary have

to submit a report on the valuation of

significant assets on or around September

29, as well as any information on

acquisition or disposal of property or grant

of security over properties. At the same

time, they have to submit forecasts of

the cashflow and profitability from their

operations.

Emas Offshore has taken hits from the

severe downturn in the oil-and-gas industry

and parent Ezra’s Chapter 11 bankruptcy

filing in mid-March. Although Emas has no

outstanding bonds, it has some US$566m

in loans due to financial institutions and

a US$170m facility due to Ezra. As of end-

November 2016, it also had about US$231m

in charter-hire liabilities.

SOUTH KOREA

DEBT CAPITAL MARKETS

› HANJIN GETS DEMAND FOR GREEN BOND

Korean Air Lines subsidiary HANJIN

INTERNATIONAL has issued a US$300m Green

bond against the backdrop of escalating

tensions between the US and North Korea.

The three-year floating-rate bonds priced

at three-month US dollar Libor plus 95bp,

inside guidance of Libor plus 105bp area.

However, the issuer paid about 5bp of

Gate faction to block proposal

„ Restructuring Bondholder group objects to latest offer for revamp

A group of holders of GLOBAL A&T ELECTRONICS ’

offshore 10% senior secured notes has

executed an agreement opposing a

restructuring proposal.

The semiconductor assembly-and-test

company, also known as Gate, had been

expected to launch a consent solicitation for

its restructuring proposal. However, since the

objecting bondholders represent 40% of one

tranche of the notes and holders of two-thirds

of each tranche need to approve the proposal,

they will be able to block it.

Earlier, Gate had announced that around

44% of holders of its US$625m 2019 bonds

issued in February 2013 and 83% of its

US$502m 2019s issued in November 2013

had approved its restructuring proposal.

Technically, the two notes are part of the

same series, but were issued at different

times and some initial holders have pursued

legal action against Gate since the exchange

offer created US$502m of additional notes.

The initial noteholders have formed two

distinct groups: one represented by Dechert

and one by Milbank, Tweed, Hadley and

McCloy and PJT Partners.

The Dechert group, which rejects the

current proposal, holds old notes issued in

February 2013 and objects to the proposal,

which would give holders of the old notes

US$540m of senior secured five-year bonds

paying 7.75%. In addition, the holders of the

initial notes currently suing Gate in New York

over the 2013 exchange offer would receive

US$15m of new notes and US$5m in cash as

settlement for their claims.

Holders of the additional notes will receive

US$100m in new secured paper and 30% of

the equity in the reorganised Gate, which will

be integrated with Singapore-headquartered

parent United Test and Assembly Centre.

Private-equity firm Affinity Equity Partners

and TPG Capital took the company private in

2007 and currently hold a 47.7% stake each.

Affinity also held some of the second lien loan

that was converted into bonds.

“The decision to proceed with a consent

solicitation in the face of firm resistance from

approximately 40% of the holders of the

old notes highlights the conflicts within the

company’s capital structure and suggests

that the board is doing the bidding of Affinity,

given its position as a holder of new notes

and equity,” wrote the Dechert noteholders,

including Marble Ridge Capital. “We continue

to be surprised at the company’s insistence on

pursuing a transaction that is doomed to fail.”

The letter added that trying to proceed

with the same restructuring proposal was

“reckless and a waste of valuable company

resources, a needless distraction for the high

quality management team, and puts the

financial health of the business in jeopardy”.

DANIEL STANTON