Nam Cheong pleads for amendments in bonds’ financial covenant

It’s struggling with challenging market conditions.

Nam Cheong Limited (NCL) is seeking consent from its bondholders amend a clause in its financial covenant. In light of the tough market conditions facing the global economy as well as the oil and gas sector, NCL is aiming for more operational and financial flexibility.

According to the company, NCL wishes to amend the clause that requires the company to ensure that interest coverage ratio for bonds due 2017, 2018, and 2019 not fall below 3:1. NCL is also asking bondholders to waive non-compliance with that clause for the test period ended 31 December 2015.

Moreover, the company is proposing to modify its interest coverage ratio to better enable the firm to ride out the challenging market conditions.

The company remains confident of its ability to service all payments on the bonds, however. It further stated that it remains “committed to prudent capital management policy.”