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Perisai Petroleum seeks deferment of bonds due in October

Perisai Petroleum seeks deferment of bonds due in October
In a worrying sign of more financial woes in the Southeast Asian oil and gas industry, Malaysia's Perisai Petroleum Teknologi is seeking its bondholders’ consent to delay to maturity of its SGD125m ($91.9m) bonds that were originally due next month to February next year.

Perisai is also seeking to defer payment of interest on the bonds, the company said in a stock market announcement..

Perisais' unit, Perisai Capital (L) Inc, will be commencing a consent solicitation process on 10 September with its bondholders seeking a waiver to non-payment of principal and interest of its debts and a deferment of maturity date of the bonds to 3 February 2017.

The company made a loss of MYR2.6m ($633,173) in the second quarter, pulling it deeper into the red and contributing to a first-half net loss of MYR6.7m for the first six months of the year.

More critically, net cash has been falling fast from MYR46.9m in the second quarter of 2015 to MYR16.9m in the most recent corresponding period.

Perisai also needs to address several short-term challenges subsequent to the restructuring its debts due in October, divesting its underperforming assets and cut costs. Executing these plans, the firm said, will ease its financials.

Singapore oil and gas firm Swiber Holdings put itself under judicial management in August as it was unable to repay debts. The fear of contagion must surely be on the back of Perisai bondholders' minds as they are asked to consider this concession, as bondholders have traditionally been leery of agreeing to waivers that would affect the receipt of payments owed to them.

But conditions are different now. When Perisai first made the bond issue in 2013, the conditions of today were unthinkable. A number of Norwegian offshore firms have undertaken successful financial restructurings including the deferment of bond issues.