KUALA LUMPUR: Marine & General Bhd shareholders have today approved its debt-to-equity scheme to restructure RM200 million of its RM923.2 million debts owed by its subsidiaries.
Marine & General's 70 per cent-owned unit Jasa Merin (Malaysia) Sdn Bhd (JMM), and two other units namely JM Global 3 (Labuan) PLC (JMG 3) and JM Global 4 (Labuan) PLC (JMG 4), have agreed with Affin Bank Bhd, Maybank Islamic Bank Bhd and Bank Pembangunan Malaysia Bhd to restructure the outstanding facilities by JMM and its subsidiaries.
Under the proposed debt restructuring, JMM will issue 150 million irredeemable preference shares (IPS) of RM1 each to the banks. The IPS are convertible into new shares in Marine & General.
In conjunction with the conversion of IPS, Marine & General will issue 1.5 billion new shares at 10 sen each amounting to RM150 million.
This means that one JMM convertible share may be exchanged for 10 new Marine & General shares worth RM1.
Any remaining IPS held shall be exchanged into new Marine & General shares automatically at the conversion price of 10 sen per Marine & General share on the 10th year of the issue date.
Marine & General's units charter out offshore support vessels for use by the oil majors and liquid bulk carriers to petro-chemical and oleo-chemical customers.
When met after the company's shareholders' meeting, Marine & General executive chairman Datuk Mohd Azlan Hashim said all resolutions had been approved.
That means Marine & General will make a RM50 million upfront payment to the banks, issue the IPS to settle RM200 million of the RM923 million debts.
This, Azlan explained, would allow JMM and its other two units 10 years to settle the balance outstanding amounts of RM723.2 million by way of term financing.
"By settling the RM200 million in the immediate term, we're saving RM7.65 million per annum on repayment interests. Our gearing of about 10 times would be pared down to three," he said.
"The banks have been supportive in allowing us to repay the remaining RM732.2 million over the next 10 years. If, however, we have the resources, we can speed up the repayment and save on the repayment interests," he added.