Singapore’s Ezion seeks to cut interest rates of six issues of notes

By Susanna Moon

Chicago, Oct. 23 – Ezion Holdings Ltd. is asking for holder approval to amend six series of securities to reduce their interest rate or distribution rate, according to six separate company notices.

In exchange, the issuer is proposing two separate options for the five series of notes and two options for its perpetual securities.

The following securities are covered by the offers:

• Series 003 S$110 million 4.7% notes due 2019;

• Series 004 S$60 million 4.6% notes due 2018;

• Series 005 S$50 million 4.85% notes due 2019;

• Series 006 S$55 million 5.1% notes due 2020;

• Series 007 S$150 million 4.875% notes due 2021; and

• Series 008 S$150 million 7% subordinated perpetual securities.

If the extraordinary resolution is passed, the interest rate for the notes will fall to zero. For the perpetual securities, the distribution rate will decrease to 0.25%. After seven years, it will increase to 1.25%, and then it will increase by 100 basis points each year.

Ezion is asking for waivers for its series 003 securities, series 004 securities, series 005 securities, series 006 securities and series 007 securities, to issue notes or shares in payment of interest due up to the date the extraordinary resolution is passed, to delete the financial covenants and to add an additional call option to redeem all of the note series, payable in the form of an equivalent principal amount of refinancing series B convertible bonds, unless the relevant securityholder elects to receive an equivalent principal amount of refinancing series A non-convertible bonds.

For the series 008 securities, the issuer is seeking to issue notes or shares in payment of interest due up to the date the extraordinary resolution is passed, to amend the step-up distribution provision, to waive the non-payment of distribution on the securities (other than as specified), to allow the securities to be convertible and to add a call option to provide that if the securities become convertible, the notes will be putable with payment in the form of an equivalent principal amount of refinancing series C non-convertible bonds.

The refinancing series A non-convertible bonds, the refinancing series B convertible bonds and the refinancing series C non-convertible bonds will each be issued as a standalone issue of securities and not as a separate series under the note program.

The early consent fee will be 6,000 shares for each S$250,000 principal amount for voting instructions sent by Nov. 15 issued at a price of S$0.2763 per share.

The holder meetings have been set for Nov. 20 in Singapore.

If the extraordinary resolution is passed and the issuer chooses to call the series 003 securities, series 004 securities, series 005 securities, series 006 securities or series 007 securities, the holders can elect to receive in exchange for their securities

• New 0.25% seven-year series A bonds with 6% redemption premium, which are callable after five years at a premium; or

• New 0.25% six-year series B convertible bonds with five-year conversion period, which are callable at par if less than 10% of the bonds remain outstanding.

If the extraordinary resolution is passed and the series 008 perpetual securities become convertible, holders will have the option to put back their securities and receive payment in the form of new 0.25% 10-year series C bonds with 7.5% redemption premium, which are callable after five years at a premium. Alternatively, they can continue to hold the amended 0.25% perpetual series 008 convertible securities with 1% coupon step-up after seven years with a call option at par after seven years.

The conversion price for the series B convertibles and the amended perpetual securities will be S$0.2487, which is a 10% discount to the minimum conversion price, for the first 60 days and S$0.2763 afterward. After the sixth month, the conversion price will be reset every six months to a price that represents the six-month volume-weighted average share price, subject to the minimum conversion price.

Holders who convert their series B convertibles within 60 days of issuance or their perpetual securities within 60 days of amendment in tranches of S$50,000 will receive bonus warrants.

The warrants are exercisable at S$0.2763 per warrant, which is a 10% discount to the six-month volume-weighted average price for 24 months.

The meeting agent is Tricor Singapore Pte. Ltd., trading as Tricor Barbinder Share Registration Services (65 6236 3550/3555 or IS.Corporateactions@sg.tricorglobal.com).

Singapore-based Ezion specializes in marine logistics and support for the offshore oil and gas industries.

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