Malaysia’s Nam Cheong gets OK to amend 5%, 5.05%, 6½% notes at meeting

By Susanna Moon

Chicago, Jan. 28 – Nam Cheong Ltd. said holders approved amendments to its S$90 million of series 002 5% notes due 2017, its S$200 million of series 003 5.05% notes due 2019 and its S$75 million of series 004 6½% notes due 2018.

The meetings were held Wednesday, and all of the measures passed without modifications, according to a notice.

Settlement will occur no later than five business days later, the company added.

As previously announced, the company sought to amend the notes’ trust deed to

• Provide for a cure mechanism in the event that the minimum interest coverage ratio of 3:1 is not met; and

• Waive any non-compliance or any potential non-compliance with respect of the test period ended on Dec. 31 and the occurrence of any potential event of default arising from any such non-compliance.

Consents were due by 9 p.m. ET on Jan. 24 for the 5% notes, 9:30 p.m. ET on Jan. 24 for the 5.05% notes and 10 p.m. ET on Jan. 24 for the 6½% notes. The consent solicitation began Jan. 4.

The company previously said it was preparing its financial statements for the financial year ended on Dec. 31, and the results for the test period ended on that date were not yet available.

The company said the proposed amendments also would provide “increased operational and financial flexibility in light of challenging market conditions facing the global economy and the oil and gas sector.”

“NCL is confident of its ability to service all payments on the notes and is committed to prudent capital management policy,” the company said in its announcement.

“As part of the cure mechanism, NCL proposes to establish and maintain an interest service reserve account in respect of each series of notes and deposit coupon payments into the relevant interest service reserve account in the event that the interest coverage ratio falls below 3:1.”

Prior to June 30, 2017, NCL will be required to maintain two coupon payments in the relevant interest service reserve account if the interest coverage ratio falls below 3:1.

After that, NCL will be required to maintain one coupon payment if the interest coverage ratio falls below 3:1 but is not lower than 2:1 and two coupon payments if the interest coverage ratio is less than 2:1 but is not lower than 1:1.

After June 30, 2017, if the interest coverage ratio is less than 1:1, NCL will not be permitted to use the cure mechanism.

Withdrawals from the relevant interest service reserve account will only be permitted after June 30, 2017 upon the satisfaction of conditions, including, but not limited to, the delivery of a certificate to the trustee and the maintenance of the required number of coupon payments in the relevant interest service reserve account, and any such withdrawals may only be used for payment of amounts due and payable under the relevant series of notes.

DBS Bank Ltd. and RHB Securities Singapore Pte. Ltd. have been appointed as joint solicitation agents.

Nam Cheong is a Kuala Lumpur-based offshore marine group that specializes in building offshore support vessels.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.