Fri, Aug 28, 2020 – 4:39 PM
OCBC has filed applications with the High Court of Singapore to place KS Energy and its principal subsidiary KS Drilling under judicial management (JM), although the troubled offshore and marine group is suggesting an alternative solution.
This came after the bank sent letters of demand to KS Energy, KS Drilling and six other subsidiaries for a US$230.7 million secured term loan and a S$5 million unsecured bridging loan, both owed by KS Drilling.
KS Drilling is an 80.09 per cent-owned subsidiary of KS Energy. The latter said it gave US$150 million in guarantees for the term loan, although the other subsidiaries' guarantees are "much less".
OCBC is looking to appoint Deloitte & Touche's Andrew Grimmett and Lim Loo Khoo as the interim judicial managers, pending the hearing on the JM application, said KS Energy on Friday.
The court hearing for the interim JM application will take place on Aug 31, while the pre-trial conference for the JM application will be held on Sept 10.
Stay updated with
BT newsletters
In response to the bank's court applications, the oilfield supply and services provider proposed to put in place measures to let OCBC "fully monitor and supervise" all its business operations.
These measures will give the lender "all the transparency, control and protection it requests without having the adverse effects on the pledged assets that a JM scheme brings", KS Energy said.
It added that the rigs pledged to OCBC are in "no jeopardy from other parties", and disputed the need for an interim JM application as there is no risk of dissipation or deterioration of assets. KS Drilling's liability under the term loan is secured by securities including mortgages over some of its jack-up and land rigs in favour of OCBC.
"The proposed judicial managers are not better placed than the present management to continue the company's business so as to safeguard its and its creditors' interests," KS Energy said.
It added: "There is no evidence of the company behaving fraudulently at the expense of the creditors."
KS Energy group chairman and chief executive officer (CEO) Richard Wiluan stated that it is fully committed to working with OCBC to resolve the bank's concerns in a manner that will maximise the interest of all creditors and the company.
He noted that the group had been facing unprecedented challenges, just like its industry peers, after the oil price collapse and supplRead More – Source
