IFR Asia – September 30, 2017

(Barry) #1

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
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