KUALA LUMPUR (Sept 9): Eversendai Corporation Bhd (KL:SENDAI) said the group has received full debt settlement in relation to one of its oil and gas (O&G) lift boat deliveries to the private vehicle of its largest shareholder and group managing director Tan Sri AK Nathan.

In a statement announcing a RM1.1 billion new contract wins by Eversendai, Nathan said the group’s Ijarah facility drawdown for the first lift boat, Vahana Aryan, “has been fully settled by Vahana Offshore (M) Sdn Bhd”.

Eversendai raised borrowings to build two lift boats contracted by Vahana Offshore, where Nathan is also a shareholder, back in 2014.

“Eversendai’s total borrowings has reduced by 26% from RM1.05 billion (at end-2023) to RM778 million, and we are working towards reducing the borrowings further in the next few years,” said Nathan, who owns 69.77% in Eversendai, where he is also executive chairman.

The debt reduction has been reflected in the group’s April-June quarter. In the same period, trade receivables fell to RM476.47 million, from RM894.52 million at end-2023, partly thanks to Vahana Offshore’s settlement.

When contacted, Nathan told The Edge that Vahana Offshore still owes Eversendai US$63 million (RM275.44 million) for the second vessel, with its construction now expected to be completed by end of this year. Vahana Offshore is speaking to banks and a potential investor to further finance the project, Nathan added.

The latest balance sheet position has reduced Eversendai’s net gearing to 1.74 times, from 2.78 times at the end of last year. Short-term borrowings stood at RM758.28 million, while retained losses stood at RM448.87 million, the company filing showed.

In total, Vahana Offshore contracted Eversendai to construct two vessels for RM850 million, but the O&G industry was swiftly hit by a prolonged downturn beginning in 2015.

Eversendai at the time took a loan to execute the liftboat contract. The plan was to transfer the loan to Vahana Offshore later, but the initial bank ran into financial troubles, and the subsequent bank insisted that the loan remain on Eversendai’s books, rather than on Vahana Offshore’s, Nathan told The Edge in an interview in March.

At the time of writing on Monday, shares of Eversendai traded seven sen or 13.3% higher at 59.5 sen, valuing the group at RM464.76 million.