COUNTRY REPORT SOUTH KOREAUnder the S$120m 4.75% 2021s
and the S$125m 4.9% 2022s, if the
original shareholders in the Singapore
construction and engineering firm cease
to collectively own a minimum total
of 25%, a change of control occurs and
bondholders have a right to exercise a put
option.
Bondholders have until November 2 to
submit their intention to exercise the put.
The redemption of the funds will be on
December 11.
Original shareholders Lim Tiam Seng,
Lim Tiang Chuan, Lim Tian Back, Lim Sock
Joo, Lim Tian Moh, Dawn Lim Sock Kiang
and Kwek Lee Keow completed the sale of a
combined stake of 29.73% in the company
on October 8 to Singhaiyi Group managing
director Celine Tang.
RESTRUCTURING
› FALCON FACES MORE RISKS
Cash-strapped FALCON ENERGY faces a
heightened liquidity risk that casts
significant doubt on its ability to continue
as a going concern, said auditor Deloitte &
Touche.
In a note released to the Singapore
Exchange last Tuesday, the auditor said
that the Singaporean oil-and-gas services
provider reported a net current liabilities
status of US$11.4m in the fiscal year
ending June 30 2018 and a loss before tax
of US$93.45m. It also had a net capital
deficiency of US$172.98m in 2018 against
US$100.5m in 2017.
Falcon faces a number of challenges,
including uncertainties over its ability to
successfully negotiate with principal and
other lenders to the group, finalise a debt
restructuring plan which will determine
its ability to service borrowings when
they fall due, and resolve a writ of
summons and claims filed in late May by
AmBank.
The auditor also issued a qualified
opinion on an outstanding trade receivable
balance from an unidentified debtor
of US$63.382m before an allowance of
US$23.382m, as it could not conclude if the
balance was recoverable.
“These conditions...indicate the
existence of material uncertainties
which may cast significant doubt on the
group’s and the company’s ability to
continue as a going concern,” said the
auditor.
The company has been raising funds
from asset sales to pay off some loans,
paring a US$80m debt owed to banks
as of end-May. It also placed shares in
September, the proceeds of which were
used partly to pay a coupon due on
an outstanding S$50m 5.5% bond. The
bond was due in 2017 but was given
bondholder consent a year ago to extend
to 2020.SOUTH KOREA
DEBT CAPITAL MARKETS
› SHINHAN BANK PREPARES USD/EURSHINHAN BANK (Aa3/A+/A) has mandated Bank
of America Merrill Lynch, BNP Paribas and HSBC
for a US dollar or euro bond.
Fixed-income meetings began last
week in the US and Europe for a 144A/
Reg S senior transaction with a short to
immediate maturity which may follow,
subject to market conditions.
The Korean lender issued a US$400m Tier
2 bond in March.EQUITY CAPITAL MARKETS
› HYUNDAI OILBANK DELAYS LISTINGSouth Korea’s HYUNDAI OILBANK is likely to
push back its IPO to March next year, a
person familiar with the situation said.
The refiner, which originally planned
to list this year, has passed a preliminary
IPO review by the Korean Exchange and
is awaiting approval from the Financial
Services Commission.
“Approval (from the FSC) is expected to
be cleared as soon as this month and theGLP launches Asia’s largest Samurai loan
Loans Asian warehouse giant in Japan loan debutSingapore-based warehouse operator GLP
is making its debut in Japan’s loan market
with a ¥60bn (US$531m) borrowing that will
be the largest Samurai loan from Asia.
Mizuho Bank is the sole mandated lead
arranger and bookrunner of the deal,
which will partially refinance a US$4.108bn
leveraged buyout loan completed in
December for the buyout of GLP.
The Samurai loan, structured as a plain-
vanilla corporate borrowing, comprises five
and seven-year tranches.
Mizuho pre-funded the facility in
September and launched it into syndication
earlier this month.
A bank meeting was held in Tokyo
on October 4 with representatives from
Japanese regional banks, international
lenders and leasing companies attending.
Responses are due by November 9.
Samurai and Ninja loans are gaining
popularity with non-Japanese borrowers.Ninja loan volume, including Samurai loans,
hit a decade high in the third quarter as
international companies raised low-cost,
long-term loans in Japan to take advantage
of attractive cross-currency swaps and
domestic banks’ appetite for high-yielding
loans.
Ninja loans can be denominated in any
currency and include Samurai loans, which
are distributed in Japan and denominated
only in yen.
In December, GLP raised US$4.108bn
through what was one of Asia’s largest
LBO loans. That borrowing comprised a
US$750m five-year term loan tranche A1, a
US$750m three-year term loan tranche A2,
a US$2.108bn two-year term loan tranche
B and a US$500m five-year revolving
credit facility with respective opening
margins of 135bp, 120bp, 110bp and 135bp
over Libor.
The deal offered a top-level blendedall-in pricing of 135.4bp based on a blended
margin of 124.06bp over Libor and blended
tenor of 3.095 years.
Citigroup, DBS Bank, Goldman Sachs,
MUFG and Mizuho were the original MLAs
and bookrunners, while Bank of China, Bank
of Communications, China Merchants Bank
and Industrial & Commercial Bank of China
came in with the same title.
The loan funded the buyout of Asia’s
biggest warehouse operator in a deal that
valued the company’s equity at about S$16bn
(US$11.9bn). Special purpose vehicle Nesta
Investment Holdings was the acquiring
entity.
GLP owns and operates a US$50bn
global portfolio of 63 million square metres
of logistic facilities in China, Japan, Brazil,
the US and other markets. It is the sponsor
of Tokyo-listed GLP J-REIT which manages
US$5.5bn logistics facilities in Japan.
WAKAKO SATO