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Jasper Taps Bond Market

Last Friday, Singapore listed offshore oil and gas drilling firm Jasper Investments (“Jasper”) announced that it has added USD 75 million to its coffers, with the assistance from DnB NOR Bank ASA and Pareto Securities. The successful closing of this funding exercise will help to allay fears over its financial health previously highlighted by its auditor Foo Kon Tan Grant Thornton. Last month, the independent auditor raised a going concern issue on Jasper, drawing attention that the group’s current liabilities had exceeded its current assets by USD 56.1 million at the end of 31 March 2010.

The company explained that there is no need to be unduly worried, given that its existing current liabilities consist mainly of a loan from a Singapore bank that is secured against a mortgage on the drillship, the “Explorer”. As at 31 March 2010, the amount outstanding under the loan was USD 35 million against independent valuations of USD 280 million to USD 375 million, and therefore the security value is well in excess of the loan provided. Jasper further disclosed that this “local bank” has also increased the credit facility to USD 55 million at the end of last year. We believe that the effective interest rate for the loan is at 5.575% per annum. Jasper has no other third party borrowings other than the bank loan, and continues to receive material support from its controlling shareholders through the provision of shareholders’ loans of approximately USD 201 million.

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