KUALA LUMPUR (Aug 19): Offshore support vessel (OSV) operator Icon Offshore Bhd is making a cash call to raise up to RM250 million fresh capital and to restructure RM370.66 million of debt, partly by issue of new shares. 

Its single largest shareholder Ekuinas Nasional Bhd, which holds its 42.3% stake through Hallmark Odyssey Sdn Bhd, is committed to subscribe up to RM183 million of the proposed rights issue that is sweetened by free warrants, Icon Offshore said in a statement. The commitment of RM183 million is equivalent to 73.2% of RM250 million intended to be raised. 

Its second shareholder is Urusharta Jamaah Sdn Bhd, a wholly-owned unit of Ministry of Finance, holding an 8.8% stake.

To pave way for the rights issue, Icon Offshore, which share price is trading below 10 sen, will also undertake a share consolidation exercise, according to its filing with Bursa Malaysia this evening. 

Additionally, Icon said it is also restructuring its debt by executing supplemental agreements with its various lenders. Both corporate exercises are part of its debt restructuring plan under the Corporate Debt Restructuring Committee (CDRC) scheme. 

Icon Offshore was admitted into the CDRC on March 29, 2018. Since then, it has proposed the debt restructuring which included, amongst others, extending the repayment period of certain borrowings and converting certain borrowings into equity instruments to financiers. 

The proposed debt restructuring exercises is expected to reduce the group’s gearing ratio to 1.14 times, from 9.16 times.

As at end-March, Icon Offshore had short-term liabilities of RM601.08 million and long-term borrowings of RM47.63 million respectively, against cash equivalents of RM47.37 million. Its non-current assets stood at RM618.79 million, while it suffered from an accumulated losses of RM854.43 million, as the company has been in the red for four consecutive years.

In a statement today, Icon Offshore's acting chief executive officer Captain Hassan Ali said the exercises are part of the group's ongoing efforts to strengthen the balance sheet and position it on stronger financial footing, moving forward. 

"The debt restructuring and rights issue are intended to reduce the company’s borrowings and better align its cash flow from operations to its debt obligation, which will in turn bring positive impact to the company’s financials in the long run. 

"We look forward to the completion of the whole exercise by the end of the year, as it represents a major milestone for Icon in paring down our debt and weathering the market slowdown, whilst continuing to remain competitive in the offshore oil and gas industry," he said.