Singapore’s Ezra seeks to amend S$150 million 4 7/8% notes due 2018

By Wendy Van Sickle

Columbus, Ohio, March 21 – Ezra Holdings Ltd. said it began a consent solicitation for its S$150 million of 4 7/8% notes, series 003, due 2018.

The company said in an announcement that it and its subsidiaries are “likely to face strong headwinds in the foreseeable future” and that it has taken steps to evaluate its financial covenants as part of its overall capital management.

“In order to provide for increased operational and financial flexibility in light of the softer market conditions facing the global economy and the oil and gas sector, the company believes that pre-emptive steps should be taken with respect to its financial management strategies,” the company said.

Accordingly, it proposes to provide for a cure mechanism for the financial half-years ending on Feb. 29, Aug. 31, Feb. 28, 2017, Aug. 31, 2017 and Feb. 28, 2018 to the ratio of consolidated EBITDA to the consolidated interest expense [the interest coverage ratio] of the notes’ trust deed.

Specifically, the company proposes to establish an interest service reserve account for the notes with trustee HSBC Institutional Trust Services (Singapore) Ltd.

If the interest coverage ratio falls below specified levels, the company will make a one-time deposit into the interest service reserve account such that the amount standing to the credit of the account is not less than the interest reserve balance.

Those specified levels are 1.75:1 for the financial half-years ended Feb. 29 and ending on Aug. 31; 2.5:1 for the half-years ending on Feb. 28, 2017 and Aug. 31, 2017; and 3.0:1 for the half-year ending on Feb. 28, 2018.

The interest reserve balance for each respective financial half-year is:

• For the half-years ended Feb. 29 and ending on Aug. 31 and Feb. 28, 2017, an amount equal to the interest payable on all the outstanding notes on the two successive interest payment dates following the relevant determination date in respect of the fixed rate interest periods ending on such interest payment

Dates; and

• For the half-years ending on Aug. 31, 2017 and Feb. 28, 2018, an amount equal to the interest payable on all the outstanding notes on the interest payment date immediately following the relevant determination date in respect of the fixed rate interest period ending on such interest payment date.

Funds that are deposited into the interest service account may not be withdrawn during the first three half-years. After that, withdrawals will be permitted only for paying amounts due and payable on the notes.

The cure mechanism will not be able to be used if the interest coverage ratio is less than 1.0:1 for either of the last two half-years.

The company is also proposing a waiver of any non-compliance or any potential non-compliance relating to the interest coverage ratio for the half-year ended Feb. 29 for which it is still preparing its financial statements.

The company is offering an early consent fee of S$1,250 per S$250,000 principal amount to noteholders who deliver or arrange to have delivered on their behalf by the early consent deadline valid instructions to vote in favor of the extraordinary resolution at an upcoming meeting.

The early consent deadline is 10 p.m. ET on April 4.

Those who deliver their consents at the meeting or after the early deadline but prior to the solicitation’s expiration will receive S$625 per S$250,000 principal amount.

The expiration deadline is 10 p.m. ET on April 10.

The meeting will be held at 5 a.m. ET on April 12 in Singapore.

Consent fees will be paid only if the extraordinary resolution is passed.

In order to establish a quorum, two or more people must be present at the meeting representing at least a majority of the principal amount of notes. In order for the resolution to pass, at least 75% of votes cast must be in favor of the resolution.

DBS Bank Ltd. (liabilitymanagement@dbs.com) is the solicitation agent.

Hongkong and Shanghai Banking Corp. Ltd., Singapore Branch (656 658-5863 or 656 658-5862) is the issuing and paying agent.

Ezra is a Singapore-based provider of offshore support for the oil and gas industry.

© 2015 Prospect News.
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