Krisenergy to file petition for Winding-up

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escveritas
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Krisenergy to file petition for Winding-up

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KrisEnergy Limited (the company together with its subsidiaries), an independent E&P company has reported that it has submitted a winding-up petition on 4 June 2021 to the Grand Court of the Cayman Islands as the company is unable to pay its debts and will proceed to liquidation.

The significantly lower ultimate recovery and cashflow from its most recent Cambodian's venture, Apsara Mini Phase 1A development as reviewed by Netherland, Sewell & Associates, Inc. resulted in the Company’s restructuring exercise being no longer viable.

The following factors among others such as the company's liabilities exceeding the value of the company's assets and the lack of near-term infusion of fresh funds contibuted to the this decision, said the Company.

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escveritas
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Re: Krisenergy to file petition for Winding-up

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ANNOUNCEMENT RELATING TO KRISENERGY’S WINDING UP PETITION AND KCL’S APPOINTMENT OF RECEIVERS

Keppel Corporation Limited (the “Company” or “KCL”) refers to:

(a) the announcements released by KrisEnergy Ltd (“KrisEnergy”) on 20 April 2021 and 28 April 2021 (“KrisEnergy’s April Announcements”) which disclosed certain updates on KrisEnergy’s restructuring exercise and/or the KrisEnergy-operated Apsara oil field in Block A, offshore Cambodia (“CBA”);

(b) KCL’s announcements dated 20 April 2021 (“KCL 20 April Announcement”) and 28 April 2021 in respect of KrisEnergy’s April Announcements; and

(c) KrisEnergy’s announcement released on 4 June 2021 in respect of the filing of a winding up petition with the Grand Court of the Cayman Islands.

Unless otherwise stated, all capitalised terms have the same meaning as stated in KCL 20 April Announcement.

KCL has been supportive of the KrisEnergy group’s attempt to deliver a successful financial restructuring because this was expected to preserve and generate maximum returns from KrisEnergy for the Company. Please refer to our prior announcements for details of this support.

However, KrisEnergy announced on 20 April 2021 and 28 April 2021 that, following further assessments, including that of its independent third party consultant Netherland, Sewell & Associates, Inc.: a) due to the significant underperformance of CBA, the consensual restructuring as described in previous KrisEnergy announcements was no longer viable; and b) even if the restructuring exercise was completed, there remained material uncertainty over KrisEnergy’s ability to continue as a going concern. In its latest announcement on 4 June 2021, KrisEnergy further announced that it had filed a winding-up petition with the Grand Court of Cayman Islands.

KCL benefits from a comprehensive first ranking security package over the assets of the KrisEnergy group. In view of KrisEnergy’s filing of a winding-up petition, KCL is now implementing detailed recovery plans developed in consultation with its financial advisor and legal adviser to preserve KrisEnergy’s assets and to maximise recoveries for KCL. Amongst other things, this will include imminently using that security package to appoint Patrick Bance, Mitchell Mansfield and Kent McParland each of Borrelli Walsh as joint and several receivers (“Receivers”) over the assets of a number of members of the KrisEnergy group including over the shares in and assets of KrisEnergy (Asia) Ltd. Once appointed, the Receivers will pursue all necessary action to maximise recoveries for the benefit of KCL.

As stated in KCL 20 April Announcement, the carrying values as at 31 March 2021 of KCL’s investment, contract asset and loan receivable, as well as the amount outstanding under the RCF amount to approximately S$423.2 million. KCL, together with its financial advisor has been evaluating the potential financial impact on the values as a result of recent developments in respect of KrisEnergy as described above.

Arising from the above evaluation, the Company will recognise a loss of S$318 million in respect of its exposures to KrisEnergy in its 1H 2021 financial results. The loss is measured by estimating the recoverable amounts of the various assets of KrisEnergy, less its obligations in connection with the RCF, carrying amounts of investment, contract asset and receivable from KrisEnergy, and other costs to realisation of the assets. The recoverable amounts will be re-assessed at the end of each financial reporting period.

When considering the declaration of interim and final dividends for the current financial year, the Company will take into account, inter alia, available profits and cash flows after ring fencing this impairment loss on this non-core investment.

8 June 2021
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