Singapore Bonds - More trouble (ASL Marine, Ezra Holdings)

More Bond trouble ahead:

1. ASL Marine is proposing to raise $25 million via a rights issue to repay S$100 million worth of  notes due in March 2017.

2. Ezra Holdings will seek bondholders’ approval in a meeting planned for 9 November 2016 to loosen covenants on US$150 million bonds maturing in 2018.


Based on a report by the Straits Times yesterday, 26 October 2016, an informal meeting held by Ezra highlighted that Ezra’s bond holders were “calm and positive” at the meeting.

Extracted from the SGX website is the presentation slides made at the briefing (see link):

Ezra - Informal meeting with Bond Holders


Personally, I am surprised at the cavalier attitude adopted by the bond holders if what the Straits Times’ sensing of the mood of the meeting is correct.      It is a lot of money at stake that bond holders are making a decision on and do they really understand what rights and obligations they are waiving off?    It cites that bond holders were happy that Ezra had delivered on a $3.66 million coupon on Monday and they could “feel Management’s sincerity”.   For Christ’s sake, the coupon payment is due to you! so this is nothing to be thankful to them about.   It is why you bought the bond in the first place anyway, isn’t it?   Otherwise, you would be buying the company's shares and be shareholders instead.  Not bond holders.

Think carefully before you waive away any rights and obligations that you have.   To cite an analogy, this is like cases that we read about in the newspapers whereby heartless children encourage their parents to sell off their existing premises and stay with them so that they can part-finance their purchase of a new apartment.    Sometime later, they kick their parents out of their homes when they cannot get along with them.
 
Business Times’ reporting of the event was far more balanced and I commend them for a more objective view of the meeting.   Of course, I was not privy to the details as I am not a bondholder, so only those present would be able to tell what the mood of the meeting was.

Do read through your documents carefully.   Even with a post-graduate degree in Finance, I had to read them three times before I had a better understanding of what you are giving up your rights on.

All the best to you (Ezra bond holders) for the Nov 9 meeting.

Sincere thoughts and wishes,
Green Ninja.