Perisai Petroleum Teknologi Faces Debt Challenges

• Perisai Petroleum Teknologi (Perisai) finds itself in deep waters as more than 50 dissenting holders served an “acceleration notice” last week to demand immediate repayment of the principal and interest.

• Perisai currently faces mounting challenges in negotiations with lenders on the rescheduling of its debt maturities. The group is unlikely to receive much support from its strategic shareholder, Ezra, who is facing its own problems.

• Currently, the group’s 51 percent owned subsidiary, Intan Offshore, owns nine offshore support vessels (OSV) which are chartered back to EMAS Offshore, which holds 49 percent interest in Intan Offshore. Eight of the nine charters will end in August 2017, facing a risk that they will not be renewed as half of EMAS Offshore’s OSVs have been stacked.

• Perisai could to become the next casualty in the oil and gas debt markets as it faces the redemption of its $125 million bond which matured on 3 October after bond holders voted to reject its restructuring plan.

Significance: CIMB Equities Research, which recently resumed coverage of Perisai, has downgraded Perisai from Hold to Reduce and lowered the target price from RM0.23 sen to just RM0.08. The research house added that if Perisai is liquidated today at a 20 percent discount to its blue skies valuation, there may not be enough to settle its debts, leaving shareholders with almost no residual value.