Oman’s Renaissance Services is seeking $380 million to refinance loans and consolidate certain facilities at its troubled Topaz Energy and Marine unit.
Renaissance has appointed Standard Chartered and DVB to lead the “financing initiative,” according to a statement the company lodged with the Muscat securities exchange yesterday. The company expects the finance will be secured by the end of the year.
$125 million of the funds to be raised from a consortium of creditors will go toward financing vessels under construction and investing in new ones, according to the statement.
The Topaz unit has had a difficult year, with profit falling off 77% in H1, an aborted listing on the London Stock Exchange and revelations from Renaissance in August of a long-running $2.9 fraud, “ethical misconduct and control weaknesses” and weak performance in the company’s loss-making Topaz Engineering business.
“This deal will significantly improve Topaz’s liquidity, unlock trapped equity and increase the availability of new funds to capitalise on future growth opportunities,” Vishal Goenka, Renaissance Services CFO said in the statement.
In August Goenka said Renaissance was in talks with banks to secure refinancing for existing short-term and long-term loans and to meet potential one-off expenses.
The previous CEO, Stephen Thomas, was parachuted in to Topaz to investigate “serious issues” at the business and instigate a plan to turn it around, after the sudden departure of Fazel Fazelbhoy.
The company completed its investigation into the $2.9 million fraud in September, saying the misappropriation of funds was isolated at one foreign unit but it was unlikely that the company would be able to recover the loss.
Thomas said in August that “as a minimum” Topaz Engineering needs to book a $160 million backlog by the end of 2011, and ideally $240 million if the business is to be turned around in 2012.
