(July 20): Nam Cheong is set to renege on some of its borrowings, in the latest blow to Singapore’s bond market as the shipbuilding and offshore oilfield services industry struggles to rebound from a slump in oil.

The Kuala Lumpur-based group has decided to temporarily cease repayment on all borrowings, including a semi-annual coupon due July 23 on $75 million of notes, it said in a Singapore exchange filing Thursday. The group, which had 1.84 billion ringgit ($587 million) of bank loans and bonds on March 31, is seeking a moratorium on principal repayments and asking creditors for a haircut and to convert their debt into equity.

Nam Cheong’s debt woes reflect widening cracks in the region’s offshore and marine services industry, triggered by a slump in oil prices over the past three years and a cutback in spending on exploration. Three groups in the sector including Swiber Holdings have contributed to some of the $1.35 billion of defaults in Singapore’s bond market since late 2015, according to data compiled by Bloomberg.

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