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