Yahoo Finance Perisai sounds out bondholders on potential recovery rate
By Kit Yin Boey
SINGAPORE, Aug 26 (IFR) - Holders of Perisai Petroleum Teknologi's S$125 million ($92.3 million) 6.875 percent bonds due October 3 have been warned they may recover only half of their investments, according to accounts of an informal meeting with more than 50 bondholders held by the Malaysian group on Tuesday.
Investors present at the Singapore meeting said the company was working with its adviser KPMG and had updated them about its financial situation. No offer was tabled at the informal bondholder meeting, a first held by the company, but company officials had given preliminary recovery prospects for bondholders of around 50 cents on the dollar, according to investors. Investors added the company also indicated it was working on payment of the balance, but said they were resigned to the possibility of not being paid the remaining half.
The investors declined to be named, due to the sensitivity of the matter. Perisai declined to comment.
"To be honest, getting 50 cents on the dollar is like being on a home run under such conditions," said one despondent investor.
Perisai disclosed on Wednesday that its interest cover ratio had fallen below the required minimum provided in the bond covenants. In a statement to Malaysia's stock exchange, it said it was "taking active steps in addressing this slight deviation".
The oil and gas industry services provider, which is 11.76 percent owned by Singapore's Emas Offshore, saw a net loss of 3 million ringgit ($740,000) in the second quarter. It has short-term debt of $475.4 million ringgit, the bulk of which is in the unsecured Singapore dollar bond. It also has 686.5 million ringgit in long-term debt, mainly in term loans.
Stock analysts said it was imperative that Perisai reached an amicable agreement to restructure the bonds.
"This is a crucial move towards easing its cash flows and avoid a default," said Maybank IB Research analyst Liaw Thong Jung in a note. (Reporting by Kit Yin Boey; Editing by Vincent Baby and Daniel Stanton)
