MEO misses coupon/interest paymentsNews // November 28, 2017
Miclyn Express Offshore (MEO) says it is unable to make a coupon payment because it is prioritizing cash for operations in the current difficult market environment.
In an update to stakeholders, MEO said that in the light of the continued difficulties across the industry in which the group operates, it is prioritizing its available cash for operations and is accordingly unable to make payment of: (i) the US$6,562,500 coupon payment due on 27 November 2017 in respect of the US$150,000,000 8.75% Senior Secured Guaranteed Bonds due 2018 issued by Miclyn Express Offshore Pte Ltd; and (ii) the principal instalment and interest due on 27 November 2017 in respect of certain senior secured loan facilities made available under a facility agreement originally dated 27 November 2013.
Failure to pay these amounts will constitute an event of default under and in respect of the notes and the senior secured facilities. The group also anticipates breaching certain financial covenants in respect of the notes and facilities.
However, said its primary lender remains supportive, and has also confirmed that it will, subject to certain terms, temporarily refrain from taking any enforcement action or consenting to any proposed enforcement action.
The company is working with the primary lender and the holders of the notes to finalize a consensual restructuring of the group’s indebtedness.
MEO said that, with the support of its primary lender and its other stakeholders, it is confident of achieving agreement regarding the terms of a restructuring that preserves and maximizes value for the benefit of all stakeholders.
Most recently, the group has engaged Tan Corporate Advisory Pte Ltd to assist it in finalizing discussions and implementing a restructuring once agreed.