Keppel to Rescue KrisEnergy
Rigbuilder Keppel Corp on Thursday said it will subscribe to a bond offer by KrisEnergy, potentially increasing its majority holding and throwing a lifeline to the debt-laden oil and gas explorer.
Keppel said it could raise its stake to as much as 67.33 percent from 40 percent via an up to S$140 million ($101 million) preferential offering of zero-coupon secured notes coupled with warrants that KrisEnergy announced earlier on Thursday.
Shares of KrisEnergy rose as much as nine percent in morning trade. Keppel was up 0.4 percent whereas the benchmark Straits Times Index was down by an equal amount.
KrisEnergy is among a growing list of Singaporean firms struggling to meet debt commitments due to tumbling global oil prices.It is an upstream company focused on the exploration, development and production of oil and gas in the basins of Southeast Asia.
On Thursday, it also said it would seek to extend the maturities of its S$130 million bond due in 2017 and S$200 million bond due in 2018 by five years. It proposed reducing the bonds' coupons to four percent from 6.25 percent and 5.75 percent respectively.
KrisEnergy also said it had agreed with DBS Bank to amend terms and covenants of its revolving credit facility, including extending the maturity to June 2018.
The proposed restructuring, if successful, would yield "a stable and sustainable capital structure, reduced short-term cash debt service obligations and greater liquidity," KrisEnergy said.
The firm reported a net loss for the third quarter, compared with a profit a year earlier. It also notes its new business plan will have an increased Focus on Gulf of Thailand and a targeted approach to asset development in areas such as Cambodia.