With the grim prospect of liquidation being banded around, leading Malaysian shipbuilder Nam Cheong’s executive chairman has stepped into the breach. Tycoon Tiong Su Kouk, the largest shareholder in the OSV manufacturer, has agreed to stump up RM50m ($11.93m) in cash to pay back some debts and persuade creditors to help the company swap debt for equity.
The cash will be injected via a rights issue and forms part of a restructuring plan under a court-supervised scheme of arrangement proposed to noteholders yesterday.
Nam Cheong is currently weighed down by $424m in debts owed to banks and bondholders. Of this, $88m is secured and can be paid with asset sales. However, there are still $336m in unsecured debts. For 35% of these unsecured debts, Nam Cheong says it is trying to push through a new share issue of $1 for 17 new shares, a potentially massive haircut for investors.
For the remaining 65% of total unsecured debt, Nam Cheong is asking lenders to give it seven years to repay the amount in full.
Lenders will vote on Nam Cheong’s restructuring proposals in November.
In the meantime, the company has also announced the sale of its Suntec office space in Singapore for a little over S$25m ($18.7m). It paid over S$30m for the space in October 2013.