Singapore’s Swissco defaults on interest due Oct. 16 for 5.7% notes

By Susanna Moon

Chicago, Oct. 21 – Singapore’s Swissco Holdings Ltd. missed the interest payment due Oct. 16 for its S$100 million 5.7% notes due April 16, 2018, which triggered a default under the notes.

Swissco received a notice from DB International Trust (Singapore) Ltd. as trustee that a “potential event of default” had occurred due to the failure to pay interest.

“The company will provide an update if there are further developments. In the meantime, shareholders, noteholders and the investing public are advised to exercise caution before making any decision in respect of their dealings in the company's shares and the notes,” according to the company’s notice to noteholders.

As announced Oct. 18, the company has scheduled a follow-up informal meeting with noteholders to be held on Oct. 24.

The company previously warned holders that it was unable to pay the interest due Oct. 16 after announcing on Oct. 4 that it was looking to restructure the 5.7% notes and had hired Ernst & Young Solutions LLP as an independent financial adviser.

Holders were then given an update at an informal meeting held Oct. 10 about “the steps taken by the group to deal with the challenging conditions in the industry,” according to a previous company notice.

The company expects to fund its current operations, however, with cash and revenue from existing businesses and potential asset sales.

Meanwhile, the company’s shares have been suspended from trading, effective Oct. 12.

The company had $221.6 million of debt as of June 30, with $147.5 million of bank loans due 2016 to 2020 and $74.1 million of medium-term notes due April 2018.

Swissco described its liquidity issues to investors as “very tight” with frozen credit lines amid industry challenges and rising creditor actions.

The company owes S$2,857,808.22 of interest on Oct. 16 and “seeks understanding and support of noteholders.”

The refinancing will help enhance the company’s debt structure, with “time to manage its liabilities and growth in the present industry conditions,” according to a previous announcement.

Swissco is a Singapore-based company that provides marine services to the shipping and offshore oil and gas industries.

© 2015 Prospect News.
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