Singapore’s Marco Polo to skip interest on 5¾% notes, seeks more changes amid cash crunch

By Susanna Moon

Chicago, April 13 – Marco Polo Marine Ltd. said it plans to schedule an informal holder meeting to restructure its S$50 million 5¾% notes originally due 2016 to “ensure its business sustainability.”

Most recently, as noted Oct. 14, 2016, holders had approved restructuring the 5¾% notes to push out the maturity for three more years until Oct. 18, 2019.

In return, the company agreed to pay another 1.5% interest per year on the notes and to provide security in the form of a second ranking mortgage over the group’s shipyard land in Batam, Indonesia.

On Thursday, the issuer added that it plans to skip the interest payment due April 18 “in view of the company’s current cashflow position and proposed refinancing and debt restructuring exercise ... as the monies earmarked for this have been redeployed to working capital for business sustainability.”

“The company will engage with its noteholders on the appropriate manner to address such outstanding payment pending the completion of the group’s proposed refinancing and debt restructuring exercise,” according to a company announcement on Thursday.

In a separate update, Marco Polo said it faces “cashflow challenges” due to a mix of factors including industry conditions caused by the oil slump and a “protracted” loan restructuring with the group unable to secure a formal standstill from bank lenders or additional bank facilities.

“In light of the above, to ensure its business sustainability under the current distressed market conditions for the foreseeable future, the group intends to undertake a refinancing and debt restructuring exercise of all its current secured and unsecured debts to strengthen its cash flow and working capital position.”

The company added that payments due under the group’s bank loans, invoices and contracts remain outstanding and that it is in discussions with its bank lenders and other creditors to restructure those payments “within an acceptable level of gearing for the offshore marine industry, while at the same time exploring avenues for fresh funding.”

The Singapore-based marine logistics group provides ship chartering, ship building, and conversion, repair and maintenance services.

© 2015 Prospect News.
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