JAKARTA (TheInsiderStories) - The shipping operator, PT Soechi Lines Tbk (IDX: SOCI) announced to buyback the US Dollar bond debt with total amount US$140 million through its Singaporean unit, Soechi Capital Pte. Ltd. The company also submit consent solicitation considering that the buyback will change the initial bond agreement with a coupon of 8.34 percent and the tenor up to 2023.
The tender offer process has been started helped by Standard Chartered Bank (Singapore) Ltd. The tender offer process and application for approval will end on Dec. 8, 2020. The shipper will buyback the bond with price $0.70 higher than the price of bonds traded at $0.60.
With this action, Fitch Ratings provided a Negative Ratings Watch for the bonds. The agency also emphasized Soechi‘ long-term default rating at level B with a stable outlook. As for the $200 million global bond that will mature in 2023, it will be given a B rating with a recovery rating of RR4.
The buyback program is part of the company’ effort to raises a new loan with worth of $77 million. It said, the fresh fund will be used to refinances the bond due in 2021 and also to avoid the potential default. This step is expected to be able to support business activities for the long term, both in terms of operations, financial condition and business continuity.
While, Moody’s Investors Service has downgraded Soechi Lines‘ corporate family rating to B2 from B1 with outlook remains negative. The agency also downgraded the senior unsecured rating on notes issued by Soechi Capital with the same level.
The prospect of the issuer, said Moody’s remains negative. The negative outlook reflects the risk of refinancing a $83 million syndicated loan which will mature in August 2021. It predicted, the operating losses from the shipyard business will continue to grow until 2021.
Now, Soechi Lines operates 22 fleets with various sizes across the archipelago and for the world market, they served South East Asia to India and Middle East. In the financial statements for the first quarter of 2020, the management explained, the credit facility is also a co-borrower with PT Armada Maritime Offshore, PT Multi Ocean Shipyard, PT Putra Utama Line, PT Sukses Maritime Line, PT Sukses Osean Khatulistiwa Line, and PT Selaras Pratama Utama.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
