The Singapore High Court has sanctioned Pacific International Lines’ (PIL) debt restructuring scheme on 3 March, after PIL’s bond holders voted on 1 February to accept the company’s proposal to convert the bonds to perpetual securities.
[s2If is_user_logged_in()]The debt restructuring, which PIL referred to as a scheme of arrangement, entails converting the bonds to perpetual securities, but cash payments will be accrued for at least five years before being released to the bond holders.
With the court’s ratification, PIL will proceed to lodge a copy of the order made by the Court with the Accounting and Corporate Regulatory Authority of Singapore. The debt restructuring will be effective from the date the order is lodged.
PIL has struggled in recent years, eventually turning to Heliconia Capital, a unit of the Singapore Government’s investment company Temasek Holdings.
PIL’s management said, “This is a key step towards the successful recalibration of PIL’s capital structure. In particular, it provides a clear path for the investor, Heliconia Capital Management, to invest in PIL as described in the scheme. With a strengthened and sustainable financial position, a reinvigorated PIL will be in a position to capture the opportunities offered by improving market conditions.”
Heliconia granted PIL a US$112 million emergency facility in July 2020, repayable this month. Heliconia has agreed to a second financing tranche, amounting to US$600 million, comprising debt and equity investment.
With the restructuring progressing, Heliconia will offer another US$200 million revolving credit facility that PIL can drawdown. Amounts drawn down under this facility will need to be replenished in the following years by the company.
PIL offloaded assets throughout 2020, including its subsidiary Pacific Direct Line, while it also ended its operations on the Pacific trades in early 2020. Twenty one ships, were sold in 2020.
Martina Li
Asia Correspondent
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