Singapore’s premium seafood supply chain manager, Oceanus Group has entered into a binding term sheet with two of three of its key creditors in a proposed debt restructuring, which may substantially reduce Oceanus’ total outstanding debt balance, improving its balance sheet.
The total debt balance, including accrued interest, held under the two key creditors, Ocean Wonder International Limited (OWIL) and BW Investment Limited (BWIL), amount to S$71.85 million (US$52.82 million), representing 82.8% of Oceanus’ outstanding debts.
Both parties have agreed that S$54.2 million of this balance will be converted into new Oceanus shares at a conversion price ranging between S$0.003 and S$0.02167 per share.
Similarly, it is intended that S$7.23 million of outstanding debt to Ocean King Group Limited (OKGL), the third key creditor which has yet to enter into a binding term sheet for the Proposed Restructuring, will be converted into new Oceanus shares at a conversion price ranging between S$0.003 and S$0.02167 per share.
Following the Proposed Restructuring, should OKGL agree on the terms, Oceanus’ remaining debt under its three key creditors will decrease significantly from S$81.43 million, representing 93.8% of Oceanus’ total debt balance (including accrued interest), to approximately S$20.0 million.
OWIL and BWIL have also agreed to extend the termination date of the respective loan agreements from December 31, 2016 to December 31, 2018, and interest will cease to accrue on and from July 1, 2016.
To aid the Group’s cash flow requirements in the interim, BWIL and Oceanus’ executive director and CEO Peter Koh have committed to contribute S$250,000 and S$500,000 respectively, that will be used for the payment of professional advisors’ fees relating to the Proposed Restructuring and to meet the Group’s operational costs (interim funding).
A six-month moratorium shall be imposed on the new shares issued pursuant to the Proposed Restructuring (new shares).
To meet the Group’s ongoing working capital requirements following the completion of the Proposed Restructuring, the Group intends to engage new investor(s) and management to subscribe for new shares at a subscription price to be agreed, the proceeds of which will also form part of the Interim Funding.