Business

Ezion lays out refinancing plans for bond holders

Ezion Holdings wants holders of its bonds and perpetuals to stick it out for another six to 10 years before they get their $575 million paid back in full.

The liftboat operator said it is in talks with lenders to bring down its debt and has been promised a fresh line of up to US$100 million (S$136 million) from six banks.

But the lenders need to see bond holders bite the bullet too before talks can proceed.

Ezion has a fleet of 14 liftboats, 20 rigs and 45 small vessels. At present, seven liftboats and nine rigs are deployed, but the contractors for six rigs are not paying.

According to an illustration of cash flows presented by financial adviser RSM, Ezion could make a net cash flow of US$933 million over the next six years, based on current charter rates.

Series 003 to Series 007 bond holders have two options. Option A is to defer their principal for seven years and collect a 0.25 per cent coupon a year and 5 per cent redemption premium at the end of seven years. Option B shortens the wait to six years, and bond holders can swap their holdings for equity.

For Series 008 perpetuities holders, Option C is similar to Option A except they have to wait 10 years.

Or they can choose Option D, where they continue to hold a perp but can swap their holdings for equity. - THE STRAITS TIMES

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