Singapore’s Marco Polo Marine, an integrated marine logistics provider, has proposed refinancing and debt restructuring to ensure its business sustainability under the current distressed market and amid cash flow challenges.
The company, engaged in ship chartering as well as shipyard business, said Thursday it intends to undertake a refinancing and debt restructuring exercise of all its current secured and unsecured debts to strengthen its cash flow and working capital position.
Various payments due under the group’s bank loans, invoices and contracts remain outstanding, and the group is in discussions with its bank lenders and other key creditors on restructuring these payments under the proposed debt restructuring plan that is within an acceptable level of gearing for the offshore marine industry, while at the same time exploring avenues for fresh funding.
The company will also engage its noteholders on various options in connection with the notes.
Marco Polo said that, even though the global oil price may have recently stabilized, the offshore marine industry continues to remain in a sustained depression, affecting all the companies in this sector. Most of the group’s vessels are not chartered out, with a good number of the customers of the group not paying on time or at all, leading to an accumulation of substantial aged accounts receivables which, in turn, affected the group’s working capital.
In view of the challenging market environment, the company expects to report a net loss in the second quarter of the financial year ending September 30, 2017.
Marco Polo Marine’s ability to continue as a going concern was brought into question at the end of last year by the company’s independent auditors, Mazars LLP.
Namely, as at September 30, 2016, the group reported a net current liabilities position of S$25.98 million. The group also incurred loss before tax of $16.94 million.
This indicated the existence of a material uncertainty which may cast significant doubt on the ability of the group to continue as a going concern, the auditor said.
It also said that the ability of the group to continue as a going concern was dependent on the successful negotiation and completion of the restructuring of its bank loans or the generation of sufficient cash flows.
Offshore Energy Today Staff