Jaya Holdings: Seeking debt re-structuring

Jaya is seeking debt re-structuring with its creditors. Jaya indicated that the weak industry outlook has resulted in some bankers expressing their reluctance to roll-over and/or extend existing credit facilities granted to the group. Given the slower than usual disposal of vessels and the global credit crunch, Jaya is finding it increasingly difficult to generate sufficient internal cash flow to self-fund its AHTS newbuild capital commitments of more than S$700m as of end June 2008.

Jaya is seeking to restructure its debts with creditors, and has appointed nTan Corporate Advisory Pte Ltd as its independent financial advisor to the group. The scope of advisory works include assisting Jaya to review and develop strategic options, and to better rationalize and optimise its operational activities, financial arrangements and capital structure.

Jaya and its advisors will seek the support of bankers for a standstill of repayment of amounts owing to them, pending a consensual restructuring of the group's operational activities and financial arrangements. Meanwhile, Jaya will still operate its business as per normal.

Jaya's net gearing is projected to reach 1.4x by end FY10 (FYE June), and may even go to as high as 2.0x should there be only two vessel sales in the financial year. Indeed, we had recently reiterated that Jaya’s net gearing could step up to 0.92x by end FY09 (vs. 0.66x currently), after taking into account its expected vessel sales and charter income.

Click here for more Offshore Marine Stocks Technical Analysis

Sponsored Links

Related Posts by Categories