ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation
MALAYSIAN shipbuilder Nam Cheong intends to “temporarily cease” all debt repayments, including a bond coupon payment due tomorrow, in a final bid to conserve cash and avoid liquidation.
It is the latest company in the marine sector to suffer the savage fallout of protracted low oil prices.
The loss-making company had run up 1.84 billion ringgit (Bt14.3 billion) of outstanding debts at the end of March, versus a cash balance of 116 million ringgit.
Nam Cheong used to build offshore support vessels (OSVs) speculatively in the days of peak oil, betting orders would roll in as long as OSVs were in short supply.
Now, three years into the oil price rout, buyers have disappeared and Nam Cheong is stuck with about 74 vessels at different stages of construction. Most of these vessels had been subcontracted to shipyards in China.
The firm said it is trying to cancel or delay delivery of the vessels. Under liquidation, however, its deposits would be forfeited and the unbilled contract sum of about US$770 million (S$1.05 billion) would be payable immediately.
To avoid liquidation, Nam Cheong intends to put in a scheme of arrangement with all bank lenders and bond holders under court supervision where creditors vote as a group on the settlement.
The restructuring plan itself is thin on details. Nam Cheong plans to sell assets to repay its secured bank lenders as much as it can. For the rest of its debts, it is seeking a moratorium on principal repayments and asking creditors to accept a haircut as well as a conversion of their debt into equity.
Bond holders would also be paid all of the $19.5 million in the firm’s Interest Service Reserve Accounts, equal to two coupons.
Observers say it will be a struggle for Nam Cheong to survive. Even with the standstill on its bonds and bank debt, its obligations to shipyards are huge. By industry standards, the sum borrowed from banks typically makes up 20 per cent of the down payment for the contracted vessels. Unless Nam Cheong’s bankers want to fork out much more than they are already owed to bail it out, it is hard to see how the obligations can be cleared.
The OSV market is also dismal. At end May, 1,445 OSVs were idle out of a global fleet of 3,500, said David Palmer, chief executive of Pareto Securities Asia. Official statistics reported 363 units in the order book to be delivered – 90 per cent of which would come from Asian yards – some of which would never be delivered, he added.
When will the oil industry bloodbath end? Palmer noted the offshore working rig count rose in May for the first time since July 2014. OSV utilisations have risen, although rates are yet to follow.
“There are some green shoots, but whether it is tipping the dial enough is another point,” he said.
Nam Cheong’s three tranches of outstanding bonds – $90 million due on August 28, $75 million due in July next year and $200 million due in 2019 – are all trading at distressed levels.