KUALA LUMPUR (July 20): Nam Cheong Ltd, a Singapore-listed Malaysian shipping company, announced today that it is temporarily halting repayment on all borrowings while pursuing a debt restructuring plan.

The loss-making group is struggling to bounce back from the subdued market conditions in the oil and gas (O&G) sector in which it operates. It is the latest Singapore listed O&G player after Swiber Holdings Ltd, Ezra Holdings Ltd and Rickmers Maritime Ltd that have been unable to cope with the oil price slump since 2015.

In a filing with the Singapore Exchange, Nam Cheong said it would not make a coupon payment due next Monday for a note under its Multicurrency Medium Term Note (MMTN) Programme issued together with Nam Cheong Capital Pte Ltd.

The group said it has started discussions with lenders to restructure its bank facilities as part of the ongoing restructuring activities first announced on April 23 "including the steps taken to address various obligations owed by the group that have fallen due and will fall due from time to time".

As at May 15, Nam Cheong had outstanding debt under bank loans and bonds amounting to RM1.84 billion. "While the restructuring is ongoing, the company has decided to temporarily cease repayment on all of the company's borrowings," said Nam Cheong.

"The company will also continue to engage in discussions with all stakeholders, including the holders of the notes and trustee of the notes, with respect to the restructuring," it added, while emphasising that no definitive agreements in relation to the restructuring plan have been inked so far.

Nam Cheong said it has appointed PricewaterhouseCoopers as its financial adviser to advise and assist the group on its restructuring options.

It stressed that there will be a "going concern issue" if its restructuring is not completed in a timely manner.

Nam Cheong, which builds offshore support vessels (OSV), made losses of RM55.47 million in the first quarter of the financial year ending Dec 31, 2017 (FY17) which further added to its full-FY16 losses of RM42.77 million — no thanks to a significant decline in OSV charter rates and demand altogether.