Singapore Strains Mount as ASL Marine Seeks to Issue Shares

  • ASL Marine proposes raising S$25 million via a rights issue
  • Swissco and Rickmers are struggling to repay bond investors

Strains are spreading in Singapore’s debt market as more firms in the maritime sector with borrowings coming due grapple with the slump in global trade and energy prices.

Shipbuilder and repairer ASL Marine Holdings Ltd. on Friday proposed to raise S$25 million ($17.9 million) by offering stock to existing shareholders and said it may seek additional loans to repay Singapore dollar notes due in March. Swissco Holdings Ltd., which supplies rigs and support vessels to oil and gas explorers, on the same day received a notice from its notes trustee stating that a potential event of default had occurred due to the firm’s failure to pay interest due earlier this month.

More companies in the city-state’s shipping and oil and gas services industries are facing difficulty meeting debt obligations. Shipping trust Rickmers Maritime said last week that it received a letter from lawyers representing some investors that are seeking to enforce repayment. Container throughput in Singapore shrank 8.7 percent in 2015 and the slide in crude prices over the past two years has hit the city’s firms that service offshore oil and gas rigs.

S&P Global Ratings said that it doesn’t see any earnings “upside potential” for companies within Singapore’s oil and gas sector. “Since we don’t expect any marked rebound in commodity prices, oil services will remain under pressure,” said Bertrand Jabouley, a Singapore-based director for corporate ratings for Asia Pacific at the ratings firm.

Singapore-listed ASL Marine, which started operations as a trader of scrapped steel material in 1974 and operates a shipyard in Batam in Indonesia that repairs rigs and other offshore vessels, said in its Friday filing that it “believes that its bankers will continue to support the company and grant the company’s request for the additional facility loans.”

It also said that it’s of the view that the net proceeds raised from the rights issue “will be sufficient to meet the present funding requirements.”

ASL Marine’s S$100 million bonds maturing in March 2017 have slumped 22 cents since June 1 to 70 cents on the Singapore dollar, the lowest since issuance in 2013, according to DBS Group Holdings Ltd. prices.

The company had S$21.6 million of cash and cash equivalents as of June 30 and S$592.2 million of total debt repayable, according to a previous filing. ASL Marine’s managing director Ang Kok Tian couldn’t be reached when a call was placed to his office.

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