Icon Offshore tumbles to all-time low after making cash call

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KUALA LUMPUR (Aug 20): Icon Offshore Bhd's proposed debt restructuring exercise that involves a cash call has sent its share price to an all-time low of six sen, even though its controlling shareholder Ekuinas Nasional Bhd is committed to pump in as much as RM183 million via rights issue.

Selling pressure emerged since the start of the trading day. The penny stock dipped 2.5 sen to six sen this morning, with 29.28 million shares traded. At six sen, the offshore support vessel (OSV) company is valued at RM76.52 million.

The debt-laden OSV operator has been in the red for four consecutive years with an accumulated loss of RM854.43 million. As at end-March, Icon Offshore had short-term liabilities of RM601.08 million and long-term borrowings of RM47.63 million against cash equivalents of RM47.37 million.

In a bourse filing yesterday, the group revealed that it was making a cash call to raise up to RM250 million in fresh capital and to restructure RM370.66 million of debt, partly through the issuance of new shares. The rights issue will be sweetened by free warrants.

As a result of the group's share price trading below 10 sen, Icon Offshore will also undertake a share consolidation agreement exercise.

The group also announced that it would be restructuring its debt by executing supplemental agreements with its various creditors. Both exercises are part of its debt restructuring plan under the Corporate Debt Restructuring Committee (CDRC) scheme — with the aim of eventually reducing the group's gearing ratio to 1.14 times, from 9.16 times.

See also: Icon Offshore makes cash call and converts debt into equity