Oon & Bazul’s Head of Restructuring & Insolvency, Meiyen Tan, was featured in a Bloomberg article titled “Singapore Lawyers Flag Specter of Southeast Asian Debt Relapse”.
The article was first published on 15 February 2018.
Singapore Lawyers Flag Specter of Southeast Asian Debt Relapse
By David Yong
Southeast Asian companies could struggle with another round of financial distress amid wobbling commodity prices, while industry disruptions batter the fortunes of retailers and developers, lawyers say.
Crude and coal have retreated about 10 percent from their January peaks at a time when some oil services groups and miners are still fixing their finances. Retailers look vulnerable amid recent casualties like Toys ‘R’ Us Inc. All these signal more financial stress ahead, says Meiyen Tan, Singapore’s first female head of a restructuring and insolvency practice.
“There will be plenty of distressed opportunities, though not necessarily new ones,” said Tan, a partner at Oon & Bazul LLP. While old cases are being cured, some may relapse in situations where restructurings were carried out using lofty valuations and assumptions, she added. At least $15 billion worth of bonds and loans have fallen into distress in Southeast Asia over the past five years, with Noble Group Ltd., PT Bumi Resources and Ezion Holdings Ltd. among those getting forbearance from creditors. Further stresses in financial services, energy, real estate and retail are possible, Tan said.
Many distress cases in the natural resources industry from 2014 are already “baked in,” said Tahirah Ara, a partner in Singapore at Withers LLP. While higher commodity prices have helped move cases to completion, they may not be enough to resolve all distress situations in time, she added. The retail industry is a potential pressure point amid the onslaught of online commerce that has disrupted brick-and-mortar operators in developed markets, she said.
Amid the regional debt distress, the two lawyers are setting notable landmarks for women in the restructuring and insolvency practice.
Tan is building up a team at Oon & Bazul after becoming its head late November. She moved from WongPartnership LLP, where she represented lenders against Pacific Andes Resources Development Ltd. involving $476 million of debt, among other assignments.
“It’s an opportunity to head and grow the practice in a ‘conflict-free’ environment,” she said. “Current market sentiments reveal a potential liquidity crunch and we now have an enhanced legal framework to attract more debtors to restructure in Singapore.”
Women made up 43 percent of practitioners in Singapore in 2017, a ratio that has stagnated over the past five years, according to the Law Society. Among the city state’s 80 senior counsels, 10 are women but none specializes in restructuring and insolvency, said Tan, who is also co-chair of the Singapore Chapter of International Women’s Insolvency & Restructuring Confederation.
At Withers, Tahirah worked on Bumi Resources’s $4.5 billion workout in Southeast Asia’s largest case in 2017. She is also currently handling two mandates involving Indonesian companies in the commodity sector.
“We are breaking traditional barriers” in a male-dominated industry, she said. “While there are more women partners in other areas of practices like banking and capital markets, there are surprisingly few women in the restructuring field. Debt restructuring practice is a niche area.”