(COLLECTIVELY REFERRED TO AS THE PROPOSED REGULARISATION PLAN )

Transcription

1 PERISAI PETROLEUM TEKNOLOGI BHD ( PPTB OR THE COMPANY ) (I) PROPOSED SHARE CAPITAL REDUCTION AND CONSOLIDATION; (II) PROPOSED FUND RAISING EXERCISE; (III) PROPOSED DEBT SETTLEMENT; (IV) PROPOSED SHARE ISSUANCE; (V) PROPOSED RCULS ISSUE; (VI) PROPOSED ICULS ISSUE; AND (VII) PROPOSED LIQUIDATION OF SUBSIDIARIES (COLLECTIVELY REFERRED TO AS THE PROPOSED REGULARISATION PLAN ) In this announcement, unless otherwise stated, all amounts quoted in US Dollars ( USD ) and Singapore Dollars ( SGD ) have been translated into RM based on the exchange rate of USD1.00 : RM4.294 and SGD1.00 : RM respectively, representing the middle exchange rates at 5.00 p.m. on 30 June 2017 as quoted by Bank Negara Malaysia ( BNM ). 1. INTRODUCTION On 2 October 2016, the Board of Directors of PPTB ( Board ) announced that the Company has triggered the prescribed criteria under Paragraph 2.1 of Practice Note 17 ( PN17 ) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) ( MMLR ) following an event of default in payment of the principal and interest of SGD125 million multi-currency medium term notes ( Notes ) due to the bearers of the Notes ( Noteholders ) by its wholly-owned subsidiary, Perisai Capital (L) Inc ( Perisai Capital ), and the Company being unable to provide a solvency declaration to Bursa Securities ( First Announcement ). Pursuant thereof, PPTB has been classified as an affected listed issuer under PN17. In accordance with Paragraph 5.4 of PN17 of the MMLR, the Company must then regularise its condition by undertaking a regularisation plan and must ensure that the regularisation plan: a. is sufficiently comprehensive and capable of resolving all problems, financial or otherwise that had caused the Company to trigger the prescribed criteria pursuant to PN17; b. enables the Company to regularise its financial condition such that the Company no longer triggers any of the prescribed criteria pursuant to PN17; and c. is fair and reasonable to the Company and its shareholders and will increase its shareholders value. On 3 January 2017, the Board announced that the Company was formulating a proposed regularisation plan that will not result in a significant change in the business direction or policy of the Company. On 24 February 2017, SJ Securities Sdn Bhd ( SJ Securities ), on behalf of the Board, announced that it has been appointed as the Principal Adviser to the Company to assist in the formulation and submission of a proposed regularisation plan. On 11 October 2017, SJ Securities submitted an application to Bursa Securities for an extension of time of 4 months until 11 February 2018 for PPTB to submit the proposed regularisation plan ( EOT ). Subsequently, Bursa Securities had vide its letter dated 9 November 2017 granted its approval on the extension of time. SJ Securities had on 9 February 2018, submitted an application to Bursa Securities for a further extension of time of 4 months until 11 June 2018 for PPTB to submit the proposed regularisation plan ( EOT ). Subsequently, Bursa Securities had vide its letter dated 14 March 2018 granted its approval on the extension of time. 1

2 On behalf of the Board, SJ Securities wishes to make this requisite announcement pursuant to Paragraph 4.2(a) of PN17 ( Requisite Announcement ), setting out the Company s intention to undertake a regularisation plan comprising the following proposals ( Proposed Regularisation Plan ): (i) Proposed share capital reduction and consolidation involving the following: a. proposed reduction of the Company s share capital from RM770,888,300 to RM40,000,000 by cancelling the share capital of the Company that has been lost or is unrepresented by available assets to the extent of RM730,657,505 pursuant to Section 115(a) and 116 of the Companies Act 2016 ( 2016 Act ); b. proposed cancellation of 400,000 treasury shares of RM230,795 in the treasury share account of the Company pursuant to Section 127 of the 2016 Act; and c. proposed consolidation of PPTB shares on the basis of 2 shares into 1 new ordinary share ( New PPTB Share(s) ); ( Proposed Share Capital Reduction and Consolidation ). (ii) Proposed fund raising exercise comprising: a. proposed renounceable rights issue of up to 223,390,635 New PPTB Shares ( Rights Shares ) at an issue price of RM0.10 per Rights Share on the basis of one (1) Rights Share for every existing PPTB shares held by entitled shareholders of PPTB on an entitlement date to be determined later ( Entitlement Date ) to raise up to approximately RM22.34 million ( Proposed Rights Issue ); and b. proposed private placement of up to 85,880,000 New PPTB Shares ( Placement Shares ) at an issue price of RM0.10 in the event of undersubscription of the Proposed Rights Issue ( Proposed Private Placement ). ( Proposed Fund Raising Exercise ). (iii) Proposed restructuring of PPTB s liabilities and the debt obligations of Perisai s Subsidiaries (as defined herein) ( Proposed Debt Settlement ) via the following: a. proposed scheme of arrangement pursuant to Section 366 of the 2016 Act for the settlement of PPTB s unsecured financial institution lenders, and its subsidiaries lenders and the Noteholders to which PPTB has extended a corporate guarantee ( CG Lenders ), but excluding amounts due by PPTB to its subsidiaries or associate companies ( the Inter-Co Creditors ) ( the Scheme Creditors ) via the following: aa. bb. cc. proposed issuance of up to RM64,410,000 in New PPTB Shares at an issue price of RM0.10 per PPTB Share to the Scheme Creditors ( Proposed Share Issuance ); proposed settlements to the Scheme Creditors, which are principal debts owed by Perisai Capital, Garuda Energy (L) Inc ( Garuda Energy ) and Intan Offshore (L) Ltd ( Intan Offshore ), under the Proposed Bilateral Settlements as detailed below; and if there is any balance remaining after the settlement in (aa) and (bb) above, the proposed issuance of up to RM68,777,692 in nominal value of Redeemable Convertible Unsecured Loan Stock in PPTB ( RCULS ) at an issue price of RM0.10 per RCULS; (collectively, the Proposed PPTB Scheme of Arrangement ) 2

3 b. Proposed settlement of the financial institution lenders, the Noteholders and unsecured creditors of certain identified subsidiaries ( Proposed Settlement of Subsidiaries Creditors ) via bilateral debt settlement agreements between: aa. bb. PPTB and Perisai Capital, Garuda Energy and Intan Offshore (collectively, Inter-Co Creditors ) ( Proposed Bilateral Settlements for PPTB Inter- Cos ) involving the proposed issuance of RCULS of up to RM64,410,000 in nominal value of RCULS at an issue price of RM0.10 per RCULS and proposed issuance of irredeemable convertible unsecured loan stocks in PPTB ( ICULS ) of RM600,861,888 in nominal value of ICULS at an issue price of RM0.10 per ICULS; and subsidiaries and joint venture of PPTB, namely, Garuda Energy, Intan Offshore, Perisai Pacific 101 (L) Inc ( Perisai Pacific ) and Emas Victoria (L) Bhd ( EVLB ) (collectively, Operating Subsidiaries ) and their respective financial institution lenders ( Operating Subsidiaries Lenders ) involving the settlement of the amounts due to the Operating Subsidiaries Lenders via inter alia the set-off of charged assets, set-off against the balances in the debt service reserve account and revenue account, restructuring of debts into term loans (under the terms set out below), and the distribution of RCULS and ICULS received under the Proposed Bilateral Settlements ( Proposed Bilateral Settlement for Operating Subsidiaries Lenders ). (collectively, Proposed Bilateral Settlements ); (iv) Proposed issuance of up to RM133,187,692 in nominal value of RCULS at an issue price of RM0.10 per RCULS for the settlement of creditors under the following ( Proposed RCULS Issue ): a. RM64,410,000 in nominal value of RCULS pursuant to the proposed settlement to inter-co creditors under the Proposed Bilateral Settlements for PPTB Inter-cos; and b. Up to RM68,777,692 in nominal value of RCULS pursuant to the proposed settlement to PPTB Scheme Creditors under the Proposed PPTB Scheme of Arrangement; (v) (vi) Proposed issuance of up to RM600,861,888 in nominal value of ICULS at an issue price of RM0.10 per ICULS pursuant to the Proposed Bilateral Settlements for PPTB Inter-Cos ( Proposed ICULS Issue ); and Proposed liquidation of Garuda Energy, Intan Offshore and Perisai Capital upon completion of their respective Proposed Bilateral Settlements ( Proposed Liquidation of Subsidiaries ). (items (i) to (vi) shall collectively be referred to as the Proposed Regularisation Plan ). Further details of each proposal in the Proposed Regularisation Plan are set out in the following sections. 2. DETAILS OF THE PROPOSED REGULARISATION PLAN 2.1 PROPOSED SHARE CAPITAL REDUCTION AND CONSOLIDATION As at 30 April 2018, being the latest practicable date prior to this announcement ( LPD ), PPTB has an issued share capital of RM770,888,300 comprising 1,260,872,078 ordinary shares, including 400,000 treasury shares. PPTB has accumulated losses of RM962,830,348 as at 30 June 2017 based on its audited accounts as at that date. 3

4 PPTB proposes to implement a capital reduction exercise, involving the cancellation of the share capital of the Company that has been lost or is unrepresented by available assets to the extent of RM730,888,300 pursuant to Sections 115(a) and 116 of the 2016 Act and the proposed cancellation of 400,000 treasury shares of RM230,795 in the treasury share account of the Company pursuant to Section 127 of the 2016 Act. Thereafter, the issued and paid-up share capital of PPTB shall be consolidated in such manner that every two (2) existing PPTB ordinary shares (after cancellation of treasury shares) shall constitute one (1) New PPTB Share which results in the reduction in the number of ordinary shares of PPTB to 630,236,039 New PPTB Shares. The Proposed Capital Reduction will give rise to a credit of RM730,888,300, which will in turn be utilised to offset the accumulated losses of PPTB. For illustration purpose, the proforma effects of the Proposed Share Capital Reduction and Consolidation on the share capital of PPTB and accumulated losses of PPTB at the company and group levels are as follows: Audited as at 30 June 2017 Unaudited as at 31 December 2017 Audited as at 30 June 2017 Proforma Unaudited as at 31 December 2017 RM 000 RM 000 RM 000 RM 000 Share capital 770, ,888 40,000 40,000 Treasury shares (231) (231) - - Company Level Group Level Audited as at 30 June 2017 Unaudited as at 31 December 2017 Audited as at 30 June 2017 Unaudited as at 31 December 2017 RM'000 RM'000 RM'000 RM'000 Accumulated losses (849,621) (844,220) (962,830) (964,223) Add: Credit arising from the Proposed Capital Reduction 730, , , ,888 Less: Cancellation of Treasury Shares (231) (231) (231) (231) Resultant accumulated losses* (118,964) (113,563) (232,173) (233,566) * Before taking into account any losses in the subsequent period up to the Lodgment Date. The Proposed Share Capital Reduction and Consolidation will be effected as at the date of the lodgment of a sealed copy of the order of the High Court of Malaya ( Court or High Court ) confirming the cancellation of share capital with the Companies Commission of Malaysia ( SSM ) ( Lodgment Date ). The Proposed Share Capital Reduction and Consolidation will result in an upward adjustment to the market price of each PPTB Share but will not in itself have any impact on the total market value of the PPTB Shares held by the Company s shareholders. 4

5 2.1.1 Ranking of the New PPTB Shares The New PPTB Shares shall upon allotment and issuance, rank pari passu in all respects with one another Listing and quotation An application will be made to Bursa Securities for the Proposed Share Consolidation. The New PPTB Shares shall be listed and quoted on the Main Market of Bursa Securities Procedures for the implementation of the Proposed Share Consolidation As the New PPTB Shares (after the Proposed Share Consolidation) are prescribed securities, the New PPTB Shares will be credited directly into the respective central depository system accounts of the entitled shareholders whose names appear in the Record of Depositors of the Company on the entitlement date to be determined later and no physical share certificate will be issued. In addition, the trading of the New PPTB Shares (after the Proposed Capital Reduction but before the Proposed Share Consolidation) will not be suspended for the purpose of implementing the Proposed Share Consolidation. The New PPTB Shares will be listed and quoted on the Main Market of Bursa Securities on the next market day after the entitlement date. The notices of allotment will be issued and despatched to the entitled shareholders within four (4) market days after the date of listing and quotation for the New PPTB Shares. 2.2 PROPOSED FUND RAISING EXERCISE After the Proposed Share Capital Reduction and Consolidation, the Company intends to raise a minimum of RM8,588,000 and up to RM22,339,064 with the following exercises: a) Proposed Rights Issue The Proposed Rights Issue entails the issuance of up to 223,390,635 Rights Shares at an issue price of RM0.10 to be implemented on a renounceable basis of one (1) Rights Share for every New PPTB Shares held on the Entitlement Date. As at the LPD, the issued share capital of PPTB is RM770,888,300 divided into 1,260,872,078 ordinary shares including 400,000 treasury shares and shall be reduced to RM40,000,000 divided into 630,236,039 ordinary shares after the implementation of the Proposed Share Capital Reduction and Consolidation, the details of which are set out in Section 2.1. The Rights Shares will be offered to the shareholders of PPTB whose names appear in the Record of Depositors of the Company as at the close of business on the Entitlement Date ( Entitled Shareholders ). The Entitled Shareholders can fully or partially renounce their entitlements for the Rights Shares. Accordingly, the Entitled Shareholders can subscribe for and/or renounce their entitlements to the Proposed Rights Issue in full or in part. 5

6 Any Rights Shares which are not taken up or validly taken up shall be made available for excess Rights Shares applications by the Entitled Shareholders and/or their renouncee(s) (if applicable). It is the intention of the Board to allocate the excess Rights Shares in a fair and equitable manner on such basis to be determined by the Board and announced later by the Company. In determining shareholders entitlements to the Rights Shares under the Proposed Rights Issue, fractional entitlements, if any, will be disregarded and dealt with in such manner as the Board in its absolute discretion deems fit, expedient and in the best interests of the Company. b) Proposed Private Placement In the event that less than 85,880,000 Rights Shares are subscribed under the Proposed Rights Issue, up to 85,880,000 Placement Shares at an issue price of RM0.10 per Placement Share will be offered to be placed out to the following parties, so as to ensure that at least RM8,588,000 will be raised under the Proposed Fund Raising Exercise: Subscribers Number of Subscription Sum Placement Shares RM Sage 3 Capital Sdn 42,940,000 4,294,000 Bhd To be identified 42,940,000 4,294,000 Total 85,880,000 8,588,000 If the number of Placement Shares to be placed out is less than 85,880,000, the Placement Shares to be offered to each of the above subscribers will be reduced proportionately. For illustration purpose, the minimum and maximum number of Rights Shares and/or Placement Shares to be issued under the Proposed Rights Issue may be as follows: Minimum Scenario: Maximum Scenario: 85,880,000 Rights Shares and/or Placement Shares will be issued, upon implementation of the Proposed Share Capital Reduction and Consolidation, assuming that: none of the outstanding exercisable ESOS Options as at the LPD are exercised prior to the entitlement date; and the Company only achieves the minimum proceeds level of RM8,588,000 under the Proposed Fund Raising Exercise. 223,390,635 Rights Shares, upon implementation of the Proposed Share Capital Reduction and Consolidation; assuming that: full exercise of all the outstanding ESOS Options as at the LPD are exercised before the entitlement date; and Proposed Rights Issue are fully subscribed Basis of determining and justification for the issue price of the Rights Shares and Placement Shares The Board has decided to fix the issue price of the Rights Shares and Placement Shares at RM0.10 per Rights Share/Placement Share. 6

7 The issue price of RM0.10 per Share was arrived at after taking into consideration, amongst others, the following: (i) (ii) (iii) the theoretical ex-rights price ( TERP ) of existing PPTB Shares of RM based on the five (5)-day volume weighted average market price ( 5-day VWAP ) of existing PPTB Shares up to and including the LPD of RM0.0448, after the Proposed Share Consolidation and Proposed Rights Issue (based on the Minimum Scenario. The issue price of RM0.10 per Rights Share/Placement Share represents a premium of approximately 10.1% to the abovementioned TERP; the prevailing market conditions; the current and future prospects of the PPTB Group; and (iv) the minimum funding requirements of PPTB as set out in Section Minimum Subscription Level for the Proposed Rights Issue As stated in Section 2.2 of this Requisite Announcement, PPTB intends to raise the minimum proceeds of RM8,588,000 of the Minimum Subscription Level, from the Proposed Rights Issue to meet the funding requirements of the PPTB Group, which will be channelled towards the proposed utilisation of proceeds as set out in Section 3 of this announcement. However, the Proposed Rights Issue will not have any underwriting arrangement because the Proposed Private Placement is in place to ensure that the Minimum Subscription Level will be met Ranking of the Rights Shares and Placement Shares The Rights Shares and Placement Shares to be issued under the Proposed Rights Issue and Proposed Private Placement respectively shall, upon allotment and issue, rank pari passu in all respects with each other and the then existing PPTB Shares, save and except that they shall not be entitled to any dividends, rights, allotments and/or any other forms of distributions that may be declared, made or paid to the shareholders of the Company, the entitlement date of which is prior to or on the date of allotment of the Rights Shares and/or Placement Shares Listing of and quotation for the Rights Shares and Placement Shares An application will be made to Bursa Securities for the listing of and quotation for the Rights Shares and Placement Shares to be issued on the Main Market of Bursa Securities on the listing date of the Rights Shares and Placement Shares, respectively. [the rest of this page is intentionally left blank] 7

8 2.3 PROPOSED DEBT SETTLEMENT As at 30 June 2017 ( Cut-off Date ), the aggregate outstanding liabilities to be settled by the PPTB Group under the Proposed Debt Resolution, amounted to approximately USD460.5 million or RM1,977.3 million, excluding the liabilities owing by PPTB to the Inter-Co Creditors of USD146.2 million or RM627.8 million. The details are as set out below: Debts to be settled under the Total Outstanding Debt Proposed PPTB Scheme of Arrangement Creditors (USD'000) (RM 000) (USD'000) (RM 000) Lenders of PPTB RHB (L) Limited ( RHB Labuan ) 10, , , ,346.2 Hong Leong Bank Berhad ( Hong Leong ) , ,693.0 Malayan Banking Berhad ( Maybank ) 2, , , ,786.5 AmBank (M) Berhad ( AmBank ) 1, , , ,846.8 OCBC Bank Malaysia Berhad ( OCBC , ,532.5 Malaysia ) (2) 15, , , ,205.0 CG Lenders OCBC Malaysia 22, , , ,071.7 DBS Singapore Limited ( DBS Singapore ) (1) 28, , , ,498.7 Oversea-Chinese Banking Corporation Limited 154, , , ,753.3 ( OCBC Singapore )/Oversea-Chinese Banking Corporation Limited, Labuan Branch ( OCBC Labuan ) OCBC Singapore (1) 73, , , ,606.2 RHB Labuan (1) 45, , , ,139.7 OCBC Al-Amin Bank Berhad ( OCBC Al-Amin ) (1) 21, , , , , ,483, , ,181,266.8 Other Scheme Creditor (Perisai Capital (L) Inc) Noteholders (3) 99, , , ,431.3 Total Liabilities to be resolved under the Proposed Debt Settlement, excluding Inter- Co Creditors 460, ,977, , ,674,903.1 Inter-Co Creditors (4) of PPTB: Intan Offshore 34, , Garuda Energy 15, , Perisai Capital 95, , Total Liabilities owing to Inter-Co Creditors 146, , Total 606, ,605, , ,674,903.1 Notes: 1 The debts owing to these lenders to be settled under the Proposed PPTB Scheme of Arrangement are the portions guaranteed by PPTB. 2 Including USD0.6 million, or approximately RM2.6 million owed by PPTB to OCBC Malaysia resulting from the crystallisation of a derivative liability. 3 The RM equivalent of SGD137.1 million, being the estimated amount owing to the Noteholders as at the Cutoff Date. 4 Before taking into account, the sum owed to the Operating Subsidiaries Lenders to be settled on behalf of Inter-Co Creditors under the Proposed PPTB Scheme of Arrangement. 8

9 It is proposed that the above outstanding liabilities be settled as follows: (i) Proposed PPTB Scheme of Arrangement for settling the following Scheme Creditors via a scheme of arrangement pursuant to Section 366 of the 2016 Act: a. PPTB s unsecured financial institution lenders; and b. CG Lenders, including the Noteholders; and (ii) Proposed Bilateral Settlements for settling the Noteholders and the financial institution lenders and unsecured creditors of certain identified subsidiaries, via bilateral debt settlement agreements as follows: a. Proposed Bilateral Settlements for PPTB Inter-Cos b. Proposed Bilateral Settlements for Operating Subsidiaries Lenders between the Operating Subsidiaries, namely EVLB, Perisai Pacific, Garuda Energy and Intan Offshore, and the Operating Subsidiaries Lenders. Set out below are the details of the Proposed PPTB Scheme of Arrangement and Proposed Bilateral Settlements: Proposed PPTB Scheme of Arrangement The Proposed PPTB Scheme of Arrangement involves the settlement of the outstanding liabilities owed by PPTB to the Scheme Creditors, comprising PPTB s unsecured financial lenders (including the amounts due to CG Lenders and the Noteholders arising from its corporate guarantees), amounting to approximately RM1.67 billion (being the equivalent of USD390,056,594) as at the Cut-off Date. It is proposed that PPTB and the Scheme Creditors agree to the settlement of the said liabilities on the following basis: i. Penalty Interest Waiver All penalty interests shall be waived; ii. Proposed Share Issuance RM64.41 million shall be settled by allocating the equivalent value in new PPTB Shares to be issued at RM0.10 per PPTB Share to the Scheme Creditors ( Settlement Shares ) in proportion to each Scheme Creditors outstanding debt as at the Lodgment Date via the Proposed Share Issuance. In the event such allocated PPTB Shares are not accepted by any of the Scheme Creditors, the amount owing by PPTB to such Scheme Creditor shall be deemed waived and reduced by the value of the Settlement Shares so allocated to the Scheme Creditor. The details of the Proposed Share Issuance are as follows: a) Number of Settlement Shares The Proposed Shares Issuance will entail the issuance of up to RM64.41 million of Settlement Shares, to the Scheme Creditors according to the allocation based on the proportion of each Scheme Creditor s outstanding debt as at the Cut-off Date. All the Settlement Shares to be issued under the Proposed Share Issuance represent approximately 8.36% of the issued share capital of PPTB of RM770,888,300 as at the LPD. 9

10 b) Ranking of the Settlement Shares The Settlement Shares to be issued shall, upon allotment and issuance, rank pari passu in all respects with the then existing issued PPTB Shares, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid prior to the allotment of the Settlement Shares. c) Listing of and quotation for the Settlement Shares An application will be made to Bursa Securities for the listing of and quotation for the Settlement Shares on the Main Market of Bursa Securities. d) Basis and justification of the issue price of the Settlement Shares The Board had fixed the issue price of the Settlement Shares at RM0.10 each after taking into consideration the following: i. the regularised financial position of PPTB after the Proposed Regularisation Plan; ii. iii. the potential future earnings of the PPTB Group; and the prevailing historical market price of PPTB Shares. The issue price represents a premium of approximately 10.1% to the TERP of existing PPTB Shares of RM based on the 5-day VWAP of PPTB as at the LPD of RM0.0448, after the Proposed Share Consolidation of PPTB Shares and Proposed Rights Issue (based on the Minimum Scenario). iii. RCULS In the event any debt or such part thereof is not fully settled after the settlement under the Proposed Share Issuance as stated in Section (ii) above and the Proposed Bilateral Settlements as stated in Section below, the remaining balance outstanding, if any, shall be settled by the issuance of up to 687,776,917 of RCULS at an issue price of RM0.10 per RCULS, in proportion to the remaining balance outstanding. Upon issuance of all the said RCULS, all liabilities of PPTB to the Scheme Creditors shall be deemed fully settled and extinguished Proposed Bilateral Settlements The Proposed Bilateral Settlements for PPTB Inter-Cos involve the settlement of the outstanding liabilities owed by PPTB to the Inter-Co Creditors, namely Perisai Capital, Garuda Energy and Intan Offshore. As at the Cut-off Date, the total amounts owed by PPTB to the Inter-Co Creditors stood at USD146.2 million or RM627.8 million, as set out below: PPTB Inter-Co Creditors Outstanding as at 30 June 2017 USD 000 Outstanding as at 30 June 2017 RM 000 Garuda Energy 15, , Intan Offshore 34, , Perisai Capital 95, , Total 146, ,

11 PPTB shall enter into separate bilateral settlement agreements with each Inter-Co Creditor to settle their respective debts on the following terms: i. Bilateral Settlement Agreement between PPTB and Intan Offshore The liabilities owing by PPTB to Intan Offshore, which stood at USD34.7 million or RM149.1 million as at the Cut-off Date, shall be settled as follows: a) Interest Waiver All interest from the Cut-off Date shall be waived. b) Settlement by PPTB on behalf of the Inter-Co Creditor under the Proposed PPTB Scheme of Arrangement The liabilities owing by PPTB to Intan Offshore shall be reduced by the issue price of the Settlement Shares issued by PPTB of RM0.10 per share, if any, in part settlement on behalf of Intan Offshore of its debt to DBS Singapore as set out in Section above. c) Settlement by issuance of ICULS The remaining liabilities owing by PPTB to Intan Offshore after the waiver in (a) and settlement in (b), shall be settled in full by PPTB issuing up to RM144,357,087 in nominal value of ICULS at the issue price of RM0.10 per ICULS to Intan Offshore. Each ICULS issued shall reduce the amount owing by PPTB to Intan Offshore by RM0.10. All claims by Intan Offshore against PPTB shall be released and fully discharged upon issuance of the ICULS. ii. Bilateral Settlement Agreement between PPTB and Garuda Energy The liabilities owing by PPTB to Garuda Energy, which stood at USD15.6 million or RM67.0 million as at the Cut-off Date, shall be settled as follows: a) Interest Waiver All interest from the Cut-off Date shall be waived. b) Settlement by PPTB on behalf of the Inter-Co Creditor under the Proposed PPTB Scheme of Arrangement The liabilities owing by PPTB to Garuda Energy shall be reduced by the issue price of the Settlement Shares issued by PPTB of RM0.10 per share, if any, in part settlement on behalf of Garuda Energy of its debt to OCBC Malaysia as set out in Section above. c) Settlement by issuance of ICULS The remaining liabilities owing by PPTB to Garuda Energy after the waiver in (a) and settlement in (b), shall be settled in full by PPTB issuing up to RM62,881,187 in nominal value of ICULS at the issue price of RM0.10 per ICULS to Garuda Energy. Each ICULS issued shall reduce the amount owing by PPTB to Garuda Energy by RM0.10. All claims by Garuda Energy against PPTB shall be released and fully discharged upon issuance of the ICULS. 11

12 iii. Bilateral Settlement Agreement between PPTB and Perisai Capital The liabilities owing by PPTB to Perisai Capital, which stood at USD95.9 million or RM411.8 million as at the Cut-off Date, shall be settled as follows: a) Interest Waiver All interest from the Cut-off Date shall be waived. b) Settlement by PPTB on behalf of the Inter-Co Creditor under the Proposed PPTB Scheme of Arrangement The liabilities owing by PPTB to Perisai Capital shall be reduced by the issue price of the Settlement Shares issued by PPTB of RM0.10 per share, if any, in part settlement on behalf of Perisai Capital of its debt to the Noteholders as set out in Section above. c) Settlement by issuance of RCULS The remaining liabilities owing by PPTB to Perisai Capital after the waiver in (a) and settlement in (b), shall be settled in part by PPTB issuing RM64,410,000 in nominal value of RCULS at the issue price of RM0.10 per RCULS to Perisai Capital. Each RCULS issued shall reduce the amount owing by PPTB to Perisai Capital by RM0.10. d) Settlement by issuance of ICULS The remaining liabilities owing by PPTB to Perisai Capital after the waiver in (a) and settlement in (b) and (c), shall be settled in full by PPTB issuing RM329,240,118 in nominal value of ICULS at the issue price of RM0.10 per ICULS to Perisai Capital. Each ICULS issued shall reduce the amount owing by PPTB to Perisai Capital by RM0.10. Further, PPTB shall issue an additional RM64,383,494 in nominal value of ICULS at an issue price of RM0.10 per ICULS to Perisai Capital to enable Perisai Capital to settle its creditors. PPTB shall waive all claims to the repayment of the value of these ICULS in the liquidation of Perisai Capital under the Proposed Liquidation of Subsidiaries as set out in Section 2.7 below. e) Distribution of RCULS and ICULS by Perisai Capital to its Creditors Upon the settlement above, the directors of Perisai Capital (via a trustee for the Proposed Debt Settlement) shall distribute the RCULS and ICULS at the issue price to settle the creditors of Perisai Capital proportionately. Subsequently, Perisai Capital shall be placed in voluntary liquidation. All claims by Perisai Capital against PPTB shall be released and fully discharged upon issuance of the RCULS and ICULS. 12

13 2.3.3 Proposed Bilateral Settlements for Operating Subsidiaries Lenders The Proposed Bilateral Settlements for Operating Subsidiaries Lenders involve the settlement of the outstanding liabilities owing by the Operating Subsidiaries, namely Garuda Energy, Intan Offshore, Perisai Pacific and EVLB, to the Operating Subsidiaries Lenders, comprising DBS Singapore, OCBC Malaysia, OCBC Singapore and RHB Labuan. As at the Cut-off Date, the total amounts owed by the Operating Subsidiaries to their respective Operating Subsidiaries Lenders stood at USD324.0 million or RM1.4 billion, as set out in the following table: Debts Outstanding as at the Cut-off Date Operating Subsidiaries Lenders Borrower Total Total USD 000 RM 000 OCBC Malaysia Garuda Energy 22, ,071.7 DBS Singapore Intan Offshore 28, ,966.5 OCBC Singapore Perisai Pacific 154, ,753.3 OCBC Singapore EVLB 73, ,914.2 RHB Labuan EVLB 45, ,391.5 Total 323, ,391,097.2 Each Operating Subsidiary shall enter into separate bilateral settlement agreements with their respective lenders to settle the debts on the following terms: i. Bilateral Settlement Agreement between Garuda Energy and OCBC Malaysia The liabilities owing by Garuda Energy to OCBC Malaysia, which stood at USD22.6 million or RM97.1 million as at the Cut-off Date, shall be deemed fully settled as follows: a) Appointment of an independent valuer for the charged asset Garuda Energy and OCBC Malaysia shall jointly appoint an independent valuer to value the asset of Garuda Energy charged to OCBC Malaysia, i.e. the Mobile Offshore Production Unit ( MOPU ). b) Disposal of the charged asset OCBC Malaysia shall be at liberty to exercise its mortgage to dispose the MOPU. The MOPU shall be deemed disposed and the value shall be credited against the debt outstanding in accordance with (c) below, even though the MOPU has not yet been disposed by OCBC Malaysia. For the avoidance of doubt, any proceeds received from the sale of the MOPU, irrespective of whether it is above or below the debt outstanding to OCBC Malaysia, shall accrue to OCBC Malaysia. The Board of Directors of Garuda Energy shall not object to the said disposal of the MOPU by OCBC Malaysia and to the debt settlement as set out in (c) below. 13

14 c) Settlement by set-off of charged assets The MOPU shall be deemed disposed (notwithstanding that the MOPU has not yet been disposed by OCBC Malaysia) and Garuda Energy s account with OCBC Malaysia, shall be credited by: i. the value determined in (a) above; ii. iii. the penalty interest charged by OCBC Malaysia. For clarification, all penalty interest shall be waived and there shall be a clawback of any penalty interest paid from the Cut-off Date up to the Lodgment Date. Any clawback shall be first applied to repay any outstanding balance prior to the issuance of the ICULS as below; the value of the Settlement Shares allocated to OCBC Malaysia under the Proposed PPTB Scheme of Arrangement and accepted by OCBC Malaysia in accordance with Section above; and shall be increased by: iv. interest accrued after the Cut-off Date up to the Lodgment Date. If the settlement in (c) above is less than the debt outstanding to OCBC Malaysia, then, such balance outstanding shall be assigned by OCBC Malaysia to PPTB in consideration of ICULS to be received by Garuda Energy under the Proposed Bilateral Settlements for Inter Cos at the issue price of the ICULS equal to the value of the lower of the said balance outstanding or the total of such ICULS received from PPTB, as the case may be. The delivery of the said ICULS to OCBC Malaysia shall be deemed to be in full and final settlement of Garuda Energy s debt to OCBC Malaysia, and Garuda Energy and OCBC Malaysia shall have no further claim against each other. Upon the PPTB s corporate guarantee to OCBC Malaysia being released and discharged on the date when the trustee shall distribute the New PPTB Shares, RCULS and ICULS to the respective CDS accounts of the PPTB Scheme Creditors, creditors of Perisai Capital, Intan Offshore and Garuda Energy respectively, and the subscribers of the Proposed Rights Issue ( Settlement Date ), Garuda Energy shall be placed in voluntary liquidation pursuant to Section 2.7 below. ii. Bilateral Settlement Agreement between Intan Offshore and DBS Singapore The liabilities owing by Intan Offshore to DBS Singapore, which stood at USD28.2 million or RM121.0 million as at the Cut-off Date, shall be settled as follows: a) Appointment of an independent valuer for the charged assets Intan Offshore and DBS Singapore shall jointly appoint an independent valuer to value the assets of Intan Offshore charged to DBS Singapore, i.e. the nine (9) units of Offshore Support Vessels ( OSVs ). 14

15 b) Disposal of the charged assets DBS Singapore shall be at liberty to exercise its mortgage to dispose the OSVs. The 9 OSVs shall be deemed disposed and the value shall be credited against the debt outstanding in accordance with (c) below, even though the 9 OSVs have not yet been disposed by DBS Singapore. For the avoidance of doubt, any proceeds received from the sale of the OSVs, irrespective of whether it is above or below the debt outstanding to DBS Singapore, shall accrue to DBS Singapore. The Board of Directors of Intan Offshore shall not object to the said disposal of the OSVs by DBS Singapore and to the debt settlement as set out in (c) below. c) Settlement by set-off of charged assets The OSVs shall be deemed disposed (notwithstanding that the OSVs has not yet been disposed by DBS Singapore) and Intan Offshore s account with DBS Singapore, shall be credited by: i. the value determined in (a) above; ii. iii. the penalty interest charged by DBS Singapore. For clarification, all penalty interest shall be waived and there shall be a clawback of any penalty interest paid from the Cut-off Date up to the Lodgment Date. Any clawback shall be first applied to repay any outstanding balance prior to the issuance of the ICULS as below; the value of the Settlement Shares allocated to DBS Singapore under the Proposed PPTB Scheme of Arrangement and accepted by DBS Singapore in accordance with Section above; and shall be increased by: iv. interest accrued after the Cut-off Date up to the Lodgment Date. If the settlement in (c) above is less than the debt outstanding to DBS Singapore, then, such balance outstanding shall be assigned by DBS Singapore to PPTB in consideration of ICULS to be received by Intan Offshore under the Proposed Bilateral Settlements for Inter Cos at the issue price of the ICULS equal to the value of the lower of the said balance outstanding or the total of such ICULS received from PPTB, as the case may be. The delivery of the said ICULS to DBS Singapore shall be deemed to be in full and final settlement of Intan Offshore s debt to OCBC Malaysia, and Intan Offshore and DBS Singapore shall have no further claim against each other. Upon the PPTB s corporate guarantee to DBS Singapore being released and discharged on the Settlement Date, Intan Offshore shall be placed in voluntary liquidation pursuant to Section 2.7 below. 15

16 iii. Bilateral Settlement Agreement between Perisai Pacific and OCBC Singapore/OCBC Labuan The liabilities owing by Perisai Pacific to OCBC Singapore/OCBC Labuan, which stood at USD154.6 million or RM663.8 million as at the Cut-off Date, shall be settled as follows: a) Interest Waiver All penalty interest shall be waived. There shall be a claw back of any paid penalty interest from the Cut-off Date up to the Lodgment Date. Any claw back shall be first applied to repay any outstanding balance prior to the settlement below. b) Settlement via the Proposed Share Issuance under the Proposed PPTB Scheme of Arrangement The amount due by Perisai Pacific to OCBC Singapore/OCBC Labuan shall be reduced by the issue price of the Settlement Shares issued by PPTB of RM0.10 per Settlement Share, if any, in part settlement on behalf of Perisai Pacific of its debt to OCBC Singapore/OCBC Labuan as set out in Section above. For clarification, there shall be no reduction of the debt if OCBC Singapore/OCBC Labuan rejects its allocation of Settlement Shares under the Proposed PPTB Scheme of Arrangement and no such Settlement Shares are issued. c) Restructuring of the Facility The remaining debt owing by Perisai Pacific to OCBC Singapore/OCBC Labuan after the waiver in (a) and settlement in (b), if any, shall be restructured into an eight (8) year Islamic hire purchase facility ( the PP- OCBC Facility ). Profit shall be charged at London Interbank Offer Rate ( LIBOR ) plus 1.5% per annum in the first three (3) years. If the Perisai Pacific jackup rig known as Perisai Pacific 101 ( PP101 Rig ) is not on charter at any time during this period, profit shall be accrued and capitalised for such period during which the rig is not on charter. However, the accrual of profits shall not be for a period of more than twelve (12) months. After the third year, profit shall be determined and charged in accordance with a step-up mechanism tied to the contract charter rate, as follows: Charter Rate Profit Rate Below USD80,000 LIBOR % More than USD80,000 but less than LIBOR % USD110,000 More than USD110,000 but less than LIBOR % USD140,000 Above USD140,000 LIBOR % All excess cash after accounting for the repayment of the PP-OCBC Facility (including the servicing of profit), relevant operational expenses of Perisai Pacific and the PPTB Group, dry docking expenses and shared costs (whichever is applicable and subject to OCBC Singapore/Labuan s approval) will be ring-fenced at Perisai Pacific. 16

17 The PP-OCBC Facility shall be secured against: (i) (ii) (iii) First Priority Ship Mortgage over the PP101 Rig; Assignment over earnings and bank accounts by Borrower, Perisai Drilling Sdn Bhd ( Operations & Maintenance Co. ) and Perisai Offshore Sdn Bhd ( Petronas License Co. ); and Assignment over Insurance by Borrower and Operations & Maintenance Co. The corporate guarantee of PPTB to OCBC Singapore/OCBC Labuan shall be released and discharged on the Settlement Date. In the event that the PP101 Rig is not chartered for a continuous period of twelve (12) months following the Lodgment Date, OCBC Singapore/OCBC Labuan shall have the option to either: i. Grant Perisai Pacific a further extension of time to secure a charter contract, on terms to be agreed by both parties; or ii. Require Perisai Pacific to dispose the PP101 Rig. The proceeds from such disposal, after deducting disposal costs, shall be utilised to repay the balance outstanding on the PP-OCBC Facility. OCBC Singapore/OCBC Labuan shall accept the sale proceeds, after deducting disposal costs, as full and final settlement of the PP- OCBC Facility. For the avoidance of doubt, any shortfall between the sale proceeds, after deducting disposal costs, and the balance owing under the PP-OCBC Facility shall be waived. iv. Bilateral Settlement Agreement between EVLB and, OCBC Singapore and RHB Labuan The liabilities owing by EVLB to OCBC Singapore and RHB Labuan (collectively, EVLB Lenders ), which stood at USD118.6 million or RM509.3 million as at the Cut-off Date, shall be settled as follows: a) Interest Waiver All penalty interest shall be waived. There shall be a claw back of any paid penalty interest from the Cut-off Date up to the Lodgment Date. Any claw back shall be first applied to repay any outstanding balance prior to the settlement below. b) Settlement via the Proposed Share Issuance under the Proposed PPTB Scheme of Arrangement The amount due by EVLB to the EVLB Lenders shall be reduced by the issue price of the Settlement Shares issued by PPTB of RM0.10 per Settlement Share, if any, in part settlement on behalf of EVLB of its debt to the EVLB Lenders as set out in Section above. For clarification, there shall be no reduction of the debt owing to either of the EVLB Lenders if such EVLB Lender rejects its allocation of Settlement Shares under the Proposed PPTB Scheme of Arrangement and no such Settlement Shares are issued to that EVLB Lender. 17

18 c) Set-off against the balance deposits in the debt service reserve account ( DSRA ) and revenue account The amount due by EVLB to the EVLB Lenders shall be set-off against the balance deposits in EVLB s DSRA and revenue account after setting aside amounts required to meet EVLB s floating, production, storage and offloading vessel's (known as Perisai Kamelia ) ( FPSO ) outstanding demobilisation, lay-up and related operating and maintenance costs up to June 2019 (whichever is applicable and subject to the EVLB Lenders approval). Any balance not utilised from this set aside amount shall be released to the EVLB Lenders upon commencement of charter income pursuant to the FPSO s deployment. In the event no charter contract is secured by EVLB for the FPSO by 31 December 2018 or such other period to be approved by majority of the PPTB Scheme Creditors with at least 50% in value, all balances in EVLB s DSRA and revenue account shall be released to the EVLB Lenders and the EVLB Lenders shall have the right to dispose the FPSO. At any time prior to the Lodgment Date, the EVLB Lenders may proceed to set-off the balance deposit in EVLB s DSRA and revenue account as set out above. The amounts received by the EVLB Lenders pursuant to the above set-off shall be applied in accordance with the terms set out in (d) below. d) Restructuring of the Facility The following amount shall be restructured into an eight (8) year term loan facility ( the EVLB-OCBC/RHB Facility ): (i) (ii) the remaining debt owing by EVLB to the EVLB Lenders after the waiver in (a), the settlement in (b) and the set-off in (c), if any, or the total debt in the event there is no settlement pursuant to (b) above, There shall be a moratorium on principal and interest payment for up to one (1) year or up to the commencement of charter income pursuant to the FPSO s deployment, whichever is earlier. During such moratorium period, interest shall be capitalised at LIBOR plus 1.5% per annum. After the moratorium period, principal and interest repayments shall be paid via equal monthly installments for the remaining seven (7) years of the EVLB-OCBC/RHB Facility, with interest charged at LIBOR plus 1.5% per annum. The EVLB-OCBC/RHB Facility shall be secured against: (i) (ii) (iii) (iv) first Preferred Naval Mortgage over FPSO; assignment over proceeds and bank accounts by Borrower, Victoria Production Services Sdn Bhd ( Operations & Maintenance Co. ) and Larizz Petroleum Services Sdn Bhd ( Petronas License Co. ); and assignment over insurance by Borrower and Operations & Maintenance Co. Charge over 51% equity interest in EVLB, Upon completion of the prospective charter, the EVLB Lenders will receive a one-off back-end fee of USD1.5 million subject to EVLB securing a minimum 3-year charter contract. 18

19 The corporate guarantee of PPTB to the EVLB Lenders shall be released and discharged on the Settlement Date. For the avoidance of doubt, in the event that no charter contract is obtained by EVLB for the FPSO by 31 December 2018, OCBC Singapore and RHB Labuan shall be at liberty to exercise their mortgage and dispose the FPSO. PPTB, EVLB or any related parties of PPTB shall not impose any restriction, limitation or condition on OCBC Singapore and RHB Labuan s right to dispose the FPSO Monitoring and control of the Proposed Debt Settlement A monitoring accountant ( MA ) shall be appointed to report on the compliance of the terms of Perisai Pacific and EVLB s restructured loans and instruments issued in accordance with the PPTB scheme. The MA is also required to inform the financial institution creditors ( FI Creditors ) of any breach by the relevant Operating Subsidiaries on the proper use of contract proceeds. The MA shall also be a cosignatory of the central depository account for the purpose of holding the ICULS to be distributed to PPTB pursuant to the liquidation of Garuda Energy and Intan Offshore ( PPTB Entitlement ICULS ), which is to be jointly controlled with PPTB ( PPTB Nominee CDS Account ). The MA shall also be co-signatory of the designated bank account for the proceeds from the disposal of the PPTB Entitlement ICULS which is jointly controlled by PPTB ( ICULS Designated Bank Account ). This appointment and monitoring frequency is subject to an annual review by the FI Creditors for their continued role. The ICULS issued to Garuda Energy and Intan Offshore, and received by PPTB shall be dealt with as follows: (a) (b) (c) (d) all ICULS shall be transferred to the PPTB Nominee CDS Account. To facilitate the sale of the ICULS no later than the second (2 nd ) half of year two (2), an advisor acceptable to the FI Creditors shall be appointed. The proceeds from the disposal of these ICULS in the nominee account shall be deposited into an ICULS Designated Bank Account; the selling price of the ICULS shall be in compliance with the rules of Bursa Malaysia, i.e. selling price shall not be more than ten percent (10%) discount to the 5-day VWAP of PPTB s shares immediately prior to the price-fixing date; in the event the ICULS are not disposed by year three (3), then the said ICULS shall be offered within one month of the third anniversary, proportionately to all RCULS holders for the redemption of the RCULS. For avoidance of doubt the acceptance of the ICULS to redeem the RCULS will be at the option of the RCULS holder. If such redemption is accepted by the RCULS holder the redemption of RCULS would be based on the ascribed value of the ICULS which shall be deemed to be the VWAP. the ICULS or the sale proceeds thereof in the PPTB Nominee CDS Account shall be utilised to redeem or pay the interest accrued on the RCULS. In the event the ICULS is distributed in specie to redeem or pay the accrued interest on the RCULS, the price of the ICULS for redemption or interest repayment shall be based on (b) above. For avoidance of doubt, the matters set out above shall not constitute a charge over the ICULS and shall only apply so long as the RCULS remains outstanding. 19

20 2.4 DETAILS OF PROPOSED RCULS ISSUE As part of the Proposed Debt Settlement, the Proposed RCULS Issue will entail the issuance of up to RM133,187,692 in nominal value of RCULS at an issue price of RM0.10 to the respective parties as follows: i. RM64,410,000 in nominal value of RCULS to be issued at RM0.10 to Perisai Capital for the repayment to the Noteholders; and ii. Up to RM68,777,692 in nominal value of RCULS to be issued at an issue price of RM0.10 to the PPTB Scheme Creditors whose debts (including any balance of principal and interest) have not been settled after waiver of all penalty interest, deducting the value of any accepted Settlement Shares issued pursuant to the Proposed Share Issuance and after the Proposed Bilateral Settlements), the details of which are set out in Section 2.3. The Proposed RCULS Issue will be implemented as part of the Proposed Debt Settlement, after the completion of the Proposed Capital Reduction and Consolidation after the Proposed Rights Issue. The number of RCULS to be issued may be varied, depending on the proven debts of the relevant Scheme Creditors after the waiver of all penalty interest, the acceptance of the settlement in Settlement Shares pursuant to the Proposed Share Issuance and the settlements under the Proposed Bilateral Settlements, after the proof of debt exercise. The RCULS will be issued in registered form and constituted by a trust deed constituting the RCULS to be executed by PPTB and a duly qualified trustee that can act pursuant to the Capital Markets and Services Act 2007 (and any amendments thereto)( Trustee ). The details of the RCULS are set out below: Issue Size and Minimum Subscription Level The million RCULS to be issued to Perisai Capital pursuant to the Proposed Bilateral Settlements for Inter-Cos between PPTB and Perisai Capital. The RCULS to be issued to the Scheme Creditors whose debts have not been settled after the waiver of all penalty interest, the acceptance of the settlement in Settlement Shares pursuant to the Proposed Share Issuance and the settlements under the Proposed Bilateral Settlements, shall amount to a nominal value of RM64,410,000. The minimum subscription level for RCULS assumes that any outstanding balance debt owed by Perisai Capital to its creditors after the Proposed Bilateral Settlements for Inter-Cos, will be partly settled via the issuance of million RCULS amounting to RM64,410,000. On the other hand, the maximum subscription level for RCULS assumes that: (i) (ii) RM64,410,000 in nominal value of RCULS will be issued to Perisai Capital as outlined above; and RM68,777,692 in nominal value of RCULS will be issued to the Scheme Creditors by PPTB to settle any outstanding balance debt owing by PPTB to the relevant Scheme Creditors, after the waiver of all penalty interest, the acceptance of the settlement in Settlement Shares pursuant to the Proposed Share Issuance and the settlements under the Proposed Bilateral Settlements. 20