Ezion Bondholders’ Independent Steering Committee (ISC) Statement
Date: 03 November 2017

SIAS has been actively moderating and facilitating the restructuring programmes of a few O&G companies, including Rickmers Maritime, Ezra, Marco Polo Marine, Nam Cheong and Ezion.

The most recent refinancing exercise that we have been assisting is Ezion’s exchange offer and consent solicitation launched October 23, which involves six separate series of debt securities with a total outstanding principal amount of S$575 million ($420 million) issued by Ezion.

This refinancing exercise is unprecedented in the Singapore-dollar debt capital markets to date because there are various options and flexibility for bondholders to choose. The exchange offer and consent solicitation are part of a wider refinancing exercise being undertaken by Ezion. The meetings of holders of the various series of securities to approve the consent solicitation are scheduled to occur November 20.

Reproduced below is a statement issued by the Independent Steering Committee, which was formed from volunteers from all the six series, who negotiated with Ezion and its professional advisors for improved terms and conditions.

ISC Statement

“Over the course of the last month, the ISC has spent a considerable amount of time with the Company and its advisers. The ISC’s goal of such engagement was to improve the terms of the Company’s refinancing proposal from that originally presented at the Second Informal Securityholders Meeting on 2 October 2017.

Given the unsecured nature of the bonds, the ISC believes that any liquidation of the Company would result in limited recoveries for bondholders as compared to secured creditors. As such, the ISC is of the view that any proposal has to reflect terms that are as fair as possible to all stakeholders in light of the competing claims on the Company, while allowing the Company the opportunity to recover its business operations and generate sufficient cashflows to repay all creditors in full.

The revised refinancing terms set out in the CSS, as negotiated by the ISC, represent a significant improvement on the Company’s original proposal by enhancing the conversion terms and redemption premiums on the proposed new bonds. The ISC notes that the refinancing proposal would only be implemented by the Company if all stakeholders, including secured creditors, shareholders and all series of bondholders, accept the compromises as proposed. The ISC believes that should the refinancing terms be accepted by all stakeholders, this would likely improve the Company’s capital structure as well as its ongoing and future business prospects and equity value which would be positive for holders of the new convertible bonds.

The members of the ISC intend to vote in favor of the refinancing proposal in respect of each Series in which they hold Securities. Although the ISC is mindful that each bondholder has his/her own unique circumstance and consideration and would vote accordingly, the ISC would in general seek the support of the wider group of bondholders to do the same at the upcoming bondholder meetings in order to give the Company the best possible chance of recovery.”

In line with the ISC’s recommendation, SIAS urge all bondholders to join the other stakeholders to support Ezion’s refinancing proposal so as to preserve value for all.



David Gerald
Founder, President & CEO
Securities Investors Association (Singapore)

 
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