Business

Nam Cheong gets $16m in cash

The major shareholder of ailing shipbuilder Nam Cheong has agreed to pay RM50 million (S$15.9 million) in cash to pare some debts, in a final bid to persuade lenders to help the firm avoid liquidation.

Malaysian tycoon Tiong Su Kouk - Nam Cheong's executive chairman - agreed to inject the sum via a rights issue as part of a restructuring plan under a court-supervised scheme of arrangement.

Nam Cheong racked up US$424 million (S$568 million) in debts, according to latest figures released last night.

Of this, US$88 million is secured and can be paid with the sale of assets.

Of the US$336 million in unsecured debts, Nam Cheong has determined that US$116 million cannot be supported by continuing operations.

It intends to swap it for new Nam Cheong shares at a rate of US$1 for 17 new shares - a substantial haircut.

Upon conversion, the group's total share capital will double from two billion shares now to four billion.

For the remaining US$220 million, Nam Cheong is asking lenders to give it seven years to repay the amount in full.- THE STRAITS TIMES

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