Singapore's Keppel to buy new bonds of struggling KrisEnergy (updated)

KrisEnergy

03/11/2016 09:49

* Keppel to subscribe to KrisEnergy's note offering 
    * KrisEnergy shares rise as much as 12.4 pct 
    * KrisEnergy seeking to delay maturity on existing bonds 
 
 (Adds details, analyst comment, updates share prices) 
    SINGAPORE, Nov 3 (Reuters) - Rig builder Keppel Corp 
 KPLM.SI  said on Thursday it would subscribe to a bond offer by 
KrisEnergy Ltd  KRIS.SI , potentially increasing its majority 
holding and throwing a lifeline to the debt-laden oil and gas 
explorer. 
    Keppel said it would subscribe to an up to S$140 million 
($101 million) preferential offering of zero-coupon secured 
notes, which are coupled with warrants, that KrisEnergy 
announced earlier on Thursday.  urn:newsml:reuters.com:*:nFWN1D317D 
    Keppel would back the offering by taking up its allotted 
portion and the amount not taken up by other shareholders. 
    Its shareholding in KrisEnergy could rise to 67.33 percent 
from the current 40 percent if no other shareholder takes up the 
preferential offering and Keppel chooses to exercise all the 
warrants. 
    Subscribing to the offer will help Keppel preserve its 
investment as well as benefit from any potential recovery in the 
market, said Yeak Chee Keong, an analyst at brokerage Maybank 
Kim Eng. 
    Shares of KrisEnergy closed 1.4 percent higher after rising 
as much as 12.4 percent. Keppel ended up 0.4 percent, while the 
benchmark Straits Times Index  .STI  closed 0.2 percent lower.   
    KrisEnergy is among a growing list of Singaporean firms 
struggling to meet debt commitments due to tumbling global oil 
prices.  
    On Thursday, it said it would seek to extend the maturities 
of its S$130 million bond due in 2017 and S$200 million bond due 
in 2018 by five years. It proposed reducing the bonds' coupons 
to 4 percent, from 6.25 percent and 5.75 percent, respectively. 
    KrisEnergy also said it had agreed with DBS Bank Ltd 
 DBSM_pc.SI  to amend terms and covenants of its revolving 
credit facility, including extending the maturity to June 2018. 
    The proposed restructuring, if successful, would yield "a 
stable and sustainable capital structure, reduced short-term 
cash debt service obligations and greater liquidity," KrisEnergy 
said. 
    The firm reported a net loss for the third quarter, compared 
with a profit a year earlier.  urn:newsml:reuters.com:*:nFWN1D3175 
    ($1 = 1.3833 Singapore dollars) 
 
 (Reporting by Aradhana Aravindan; Editing by Christopher 
Cushing and Biju Dwarakanath) 
 ((aradhana.aravindan@thomsonreuters.com; +65 6403 5659; Reuters 
Messaging: aradhana.aravindan.thomsonreuters.com@reuters.net)) 
 
Keywords: KEPPEL CORP KRISENERGY/