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We do not intend to receive any further payments or obtain any further advances or loans from Brizill
International after the Offering. In addition, we intend to fully repay the outstanding amounts due to Brizill
International, other than the Brizill Term Loan, as soon as practicable, using internally generated funds and/or
bank borrowings. Any prepayment of the Brizill Term Loan and any repayments of any outstanding amounts
due to Brizill International will have to be approved by the Audit Committee, after taking into account our
cash flow position, working capital requirements and upon due consideration of the financial covenants
imposed by banks and financial institutions relating to the repayment of shareholder loans at that particular
point of time. As and when any repayment is made upon approval of our Audit Committee, we will make an
appropriate announcement via the SGXNET.
We will cease all transactions with Brizill International upon completion of the Offering, except for the
following:
(a) principal repayment and interest payment of the Brizill Term Loan, in accordance with its terms;
(b) repayment of the balances outstanding due to Brizill International, other than the Brizill Term
Loan; and
(c) pledge of certain listed shares to Bangkok Bank by Brizill International.
Pledge of Certain Listed Shares to Bangkok Bank by Brizill International
In October 2006, Brizill International pledged certain listed shares it holds in favour of Bangkok Bank as
security for banking facilities granted to our Company. These banking facilities include: (i) a refund guarantee
facility of up to US$110.0 million; (ii) a revolving short-term loan of US$2.5 million; (iii) trade finance
facilities of up to US$60.0 million; and (iv) a term loan of US$14.4 million. See “Management’s Discussion
and Analysis of Financial Condition and Results of Operations — Borrowings”.
Our Directors believe that the pledge of listed shares by Brizill International to assist us to secure the
banking facilities from Bangkok Bank was not carried out on an arm’s length basis as Brizill International
received no benefit from the transaction.
Subsequent to completion of the Offering, we intend to negotiate for the discharge of the pledge. In the
event that Bangkok Bank does not release the pledge, Brizill International will continue to pledge the said
shares to secure the relevant facilities.
Personal Guarantee and Other Undertaking Provided by Yaw Chee Siew
In August 2006, Yaw Chee Siew provided a personal guarantee as security for banking facilities provided
to us by Bangkok Bank. These facilities include: (i) a refund guarantee facility of up to US$110.0 million;
(ii) a revolving short-term loan of US$2.5 million; (iii) trade finance facilities of up to US$60.0 million; and
(iv) a term loan of US$14.4 million. See “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Borrowings”. Yaw Chee Siew also gave a subordination undertaking to Bangkok
Bank not to demand or accept payment of any monies or liabilities or advances owing to him or Brizill
International by our Company while any facilities granted by Bangkok Bank to our Company or our subsidiary
Otto Offshore remain outstanding.
This guarantee is still in force under the revised facilities granted to us by Bangkok Bank in July 2007.
The subordination undertaking was amended to include monies owed by our subsidiary Otto Offshore to Yaw
Chee Siew. It was further amended to specify that Yaw Chee Siew may demand or accept payment of any
monies or liabilities or advances owing to him by our Company and Otto Offshore as long as the outstanding
amount of such monies or liabilities or advances owing to him by our Company and Otto Offshore is not less
than S$25.0 million.
The largest amount drawn down on the Bangkok Bank facilities during the Period under Review was
US$74.4 million. As at 31 May 2008, the amount outstanding under the facilities was US$59.5 million and as
at the Latest Practicable Date, the amount outstanding under the facilities was US$45.1 million.
In January 2008, Hong Leong Finance granted us a shipping loan facility of S$3.0 million, for which,
Yaw Chee Siew provided a personal guarantee as security. The largest amount drawn down on the Hong
Leong Finance facility as at the Latest Practicable Date was S$3.0 million.
In February 2008, Caterpillar Financial granted us a vessel construction loan facility of US$40.4 million,
for which, Yaw Chee Siew provided a personal guarantee as security. The largest amount drawn down on the
Caterpillar Financial facility as at the Latest Practicable Date was US$25.7 million. The facility includes a
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