Singapore’s Otto Marine aims to amend 7% notes due 2016 for delisting, extend to 2017

By Susanna Moon

Chicago, June 30 – Otto Marine Ltd. said Otto Marine Services Pte. Ltd. is soliciting consents to amend its S$70 million of 7% series 002 notes due 2016.

Otto is asking holders for approval to postpone the maturity of the 7% notes to Feb. 1, 2017 from Aug. 1, 2016, according to a company announcement. Accrued interest would continue to be payable on Aug. 1, and the outstanding principal amount along with accrued interest would be payable on Feb. 1, 2017,

The company also is seeking to delist the company’s shares from the Singapore Stock Exchange and is soliciting consents for amendments and waivers related to the proposed delisting.

Under the delisting proposal, the company will make an exit offer of S$0.32 per share in cash for all the issued common shares held by the shareholders.

As a result, the company is asking for a waiver of breaches and amendments to the terms of the notes as the result of the exit offer as well as for the removal of the put option upon the delisting.

Instead, the company would insert a new mandatory redemption event for the redemption of the notes within 14 days from the delisting.

The company also is asking for amendments and waivers related to the group’s financial condition, including the waiver of any non-compliance or potential non-compliance with the financial covenants.

The proposed amendments also include changes to the account charge for the interest reserve account to allow using the funds to pay interest and consent fees on the redemption date.

A pre-condition to the company's delisting application is for the issuer to set a noteholders meeting to obtain consents.

The early consent fee deadline is 5 p.m. Singapore time on July 11 and the solicitation will end at 5 p.m. Singapore time on July 13. The noteholders meeting has been set for July 15 in Singapore.

The early consent fee will be 0.5% or S$1,250 per S$250,000 principal amount. The regular consent fee will be a one-time fee of 0.3%.

Last year was one of “challenges and endurance as the market continued to be weak and competition became increasingly tough,” and the offshore marine industry remains volatile and depressed, the company said.

As such, the issuer said it is looking for a reprieve from some financial covenants for the period from Jan. 1, 2016 to June 30 as well as for the period from July 1 until all and not some only of the notes are redeemed, the release said.

The company said it has entered into a facility agreement dated June 29 with RHB Bank for a S$73 million loan.

The company intends to use S$70 million of the RHB loan to redeem the series 002 notes at par.

If the delisting proposal “does not materialize,” the company said it will consider other funding options, including a rights issue, banks loans or the sale of vessels.

DBS Bank Ltd. and Overseas-Chinese Bank Corp. Ltd. are the joint solicitation agents.

Singapore-based Otto Marine is a shipping-focused offshore marine group that operates offshore support vessels.

© 2015 Prospect News.
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