OCBC Bank has filed applications in the High Court of Singapore to put KS Energy under judicial management, with Andrew Grimmett and Lim Loo Khoo of Deloitte & Touche as interim judicial managers.
The move comes after the bank sent letters of demand to KS Energy, KS Drilling and six other subsidiaries for a US$230.7 million ($315.1 million) term loan and US$5 million bridging loan to KS Drilling.
KS Drilling is an 80.09%-owned subsidiary of KS Energy, which has provided US$150 million in guarantee for the term loan.
On the other hand, KS Energy proposed an alternative solution that would allow OCBC to fully monitor and supervise all its business operations without having the adverse effects on the pledged assets that a judicial management scheme brings.
It added that the rigs pledged to OCBC “are in no jeopardy from other parties”, and that there is no risk of dissipation or deterioration of assets that necessitates a judicial management scheme.
KS Energy Group Chairman and CEO Richard Wiluan says that the company is “fully committed to working with OCBC to resolve their concerns in a manner that will maximise the interests of all creditors and the company”.
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“Like all our peers in the industry, the KS Energy group is facing unprecedented challenges brought about by the collapse of oil price, exacerbated by massive disruptions to the global supply chain from the Covid-19 pandemic.
“OCBC has been our banker for more than 20 years. They have seen how we’ve built up our oil rig business. As we deal with the challenges in the last two years, we have taken initiatives including cost-cutting measures, to improve the company’s financial position resulting in a 72% reduction in loss for the first six months ended June 30 as compared to the previous corresponding period,” Wiluan adds.
On August 5, former Group Chairman and CEO Kris Taenar Wiluan was charged by the Commercial Affairs Department (CAD) in relation to the violation of Section 197 of the Securities and Futures Act (SFA).
See: KS Energy CEO Kris Wiluan charged for alleged false trading and market rigging
Section 197 of the SFA deals with the act of false trading and market rigging transactions.
The company said these were Mr Wiluan’s personal share purchases and are separate from the group’s current financial problems, which are felt across the industry and global economy.
