23 November 2017
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Soilbuild, Super families to help refloat Marco Polo

Business Times
07 Nov 2017
Tan Hwee Hwee

Two families behind household names in real estate and the consumer-goods sectors, Soilbuild and Super Group respectively, have been identified as being among white-knight investors looking to extend a S$60 million lifeline to troubled listed group, Marco Polo Marine.

The family office of Soilbuild's Lim Chap Huat and the private-investment firm of Super Group's David Teo are said to have agreed to pump new equity into the Marco Polo group of companies.

The equity deal with Marco Polo could mark the two tycoons' first significant forays into the offshore and marine (O&M) sector, and their respective families' largest equity exposure to the sector so far.

Marco Polo slipped into negative equity territory at the end of the third quarter ended June 30. The group's equity, net of liabilities, stood at S$150.8 million after taking in total impairment and allowances of S$299.3 million.

Of the S$60 million in fresh equity that the O&M group is seeking, S$45 million is for restructuring its total debts, which exceed S$258 million; the remaining S$15 million will go towards working capital.

The Lim and Teo families are among up to six white-knight investors to have agreed to pump in the fresh equity sought by Marco Polo's anchor shareholders, the family of chief executive Sean Lee.

Once the transaction is completed through the Super Group Teo family's investment vehicle Apricot, the family is expected to emerge as a significant shareholder in Marco Polo. Soilbuild's Mr Lim is said to have pledged a relatively smaller investment.

A third key investor with whom Marco Polo's Lee family has also penned an equity deal is from within the O&M sector. The entity could not be confirmed, but Mr Lee is rumoured to have approached two cash-rich O&M groups, PACC Offshore Services Holdings (POSH) and Penguin International.

This third key investor is expected to gain a board seat alongside Super Group's Teo family.

Marco Polo has qualified that the agreements with these new equity investors are conditional on - among other things - the successful restructuring of the group's outstanding liabilities.

The listed holding company and its Singapore-incorporated key shipyard subsidiary are pursuing restructuring via schemes of arrangement under Singapore's updated debt restructuring regime.

The group's Indonesian subsidiary, PT Marcopolo Shipyard, filed in May to place itself under Penundaan Kewajiban Pembayaran Utang (PKPU), an Indonesian regime which extends protection from creditors to entities seeking to restructure.

Boutique law firm Blackoak LLC's director, Ashok Kumar told The Business Times that the PKPU period runs for up to 270 days; an entity that fails to restructure within that timeframe will automatically be placed under liquidation.

The completion of the new equity deals is also subject to the successful restructuring of Marco Polo's S$50 million Singdollar notes and shareholders' approval of the restructuring plan.

Marco Polo had on Oct 24 launched a consent solicitation exercise (CSE) for the S$50 million notes issuance. The listed holding company is offering noteholders partial cash repayment of S$35,868 and another 1,024,800 restructuring shares at an issue price of S$0.035 per share.

Noteholders vote on the proposal on Nov 15.

Marco Polo has also tabled in court documents for the scheme application with Singapore's High Court, a 95 per cent haircut on and a partial debt-to-equity swap for certain trade claims.

In a court affidavit pertaining to a scheme application, Mr Lee said that, with the successful debt restructuring, the group stands to fend off the less-favourable outcome of being forced to liquidate its assets, which will yield marginal returns under the weakened market environment in the oil-and-gas industry.

Marco Polo did not respond to BT's request for comments.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.