KrisEnergy seeks court protection as debt mounts to as much as US$477 mil

SINGAPORE (Aug 15): KrisEnergy has asked for a court order to restrain the commencement of legal proceedings and enforcement actions by its creditors, for a period of six months.

In a filing late on Wednesday night, the independent upstream oil and gas firm said the moratorium will provide the company with "breathing space and room" which is essential in allowing it to pursue restructuring with key stakeholders.

KrisEnergy announced on Wednesday that lower oil prices and lower sales had impacted its revenue and resulted in a net loss for the 1H19 ended June 30. This also brought total debt on the balance sheet to US$476.8 million ($662 million), while gearing stood at 110.8%, as at June 30.

“It would not be feasible for the Company to make all payment(s) of its financial obligations as they fall due and therefore it requires a restructuring of its liabilities,” it added.

KrisEnergy’s existing debt agreements included a US$200 million revolving credit facility (RCF) with DBS Bank maturing on June 30 next year, $130 million 4% senior unsecured notes due in 2022 and $200 million 4% senior unsecured notes due in 2023. There is also about $139.5 million in principal amount of senior secured zero-coupon notes due in 2024 and term loans from HSBC and Standard Chartered Singapore.

In a separate filing on Wednesday night, Keppel Corp, which is a creditor and a 30% shareholder of KrisEnergy, said it supports the application.

Keppel is a holder of the zero-coupon notes due in 2024 and also holds the key economic risk in the RCF, under a bilateral contract between Keppel and DBS.

This means that Keppel may be required to make DBS whole for any loss the bank suffers under the RCF, among other things. However, Keppel said its financial adviser indicates that Keppel will not be required to make any payment to DBS.

KrisEnergy said it is aiming for a restructuring that will be equitable to all its stakeholders and will return it to viability in the shortest time possible.

KrisEnergy had also requested an immediate suspension in the trading of its shares which last traded at 3 cents.