SINGAPORE – Rigbuilder Keppel Corp on Thursday said it will subscribe to a bond offer by KrisEnergy Ltd, 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 per cent from 40 per cent 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 9 per cent in morning trade. Keppel was up 0.4 per cent 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.
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 4 per cent from 6.25 per cent and 5.75 per cent respectively.
KrisEnergy also said it had agreed with DBS Bank Ltd 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.
