Mime Petroleum addresses bondholders’ needs for Kistos acquisition

Chicago, April 19 – Mime Petroleum AS addressed bondholder concerns as it readies for a transaction whereby Kistos Holdings plc will acquire the company.

The company presented bondholders with a written resolution on Wednesday, which passed by the end of the day.

Mime has $300 million of 10¼% senior secured callable bonds due 2026 (ISIN: NO0011142036), $180 million of 13% super senior secured bonds due 2025 (ISIN: NO0012867318), $45 million hybrid callable bonds due 2083 (ISIN: NO0012867326) and $1.7 million hybrid callable bonds with PIK interest due 2083 (ISIN: NO0012867342).

Bondholders controlling more than two-thirds of each bond voted in favor of the proposals.

Revolver

It was agreed that on the completion date of the acquisition, a $100 million revolver will be provided by Kistos. The revolver will mature after the maturity dates of the senior secured callable bonds and the super senior secured bonds. Interest will be not more than 5.5%. The revolver will be permitted debt, but subordinated to the bonds.

Kistos will secure the bonds for $100 million.

If Kistos decides to carry out a tap issue on the super senior bonds, then the guarantee shall increase correspondingly.

Super senior

For the super senior bonds, bondholders have waived their mandatory redemption rights.

The equity acquisition is not being considered a change-of-control event.

The super senior bondholders are also waiving their right to board member representation.

If the acquisition closes by June 30, the super senior bondholders are asking for a $30 million pro rata redemption at par, but no interest will need to be paid. If the completion date is after June 30, noteholders are asking for the pro rata redemption, but also a ticking interest rate of 10¼% per annum from July 1 to the completion date.

Bondholders are also seeking some roll-up rights, the ability to exchange some of the super senior bonds for new bonds.

Additionally, there will no longer be an original issue discount under the super senior bonds, the maturity date will be extended one year to Sept. 17, 2026 and the interest rate will be cut to 9¾% on the completion date from the current 13%, with 4½% paid in cash and 5¼% paid in kind.

There will be a potential par call on the super senior bonds and the company may call any or all of the $45 million hybrid bonds and $45 million of the senior secured bonds.

Senior secured

Bondholders approved similar terms for the senior secured bonds, including that there will not be a change-of-control event, an amendment to roll-up exchange rights and a waiver for board member representation.

Also, within five days of the completion date, $45 million of the senior secured bonds will be redeemed at par on a pro rata basis. The same interest provisions would apply.

The issuer may raise new bonds, so long as the maturity date is at least a year after the maturity date for the existing senior secured bonds.

Hybrid bonds

Hybrid bondholders are willing to forfeit accrued interest.

The PIK bonds will be merged with the original hybrid bonds, on the same terms.

All hybrid bonds above $45 million in total principal amount will be forfeited on a pro rata basis.

All hybrid bonds may be redeemed at par on Jan. 31, 2025 based on a crude oil offload and sales threshold.

If the offload and sales threshold has not been satisfied up to Dec. 31, 2024, then another $15 million of hybrid bonds will be forfeited and canceled on a pro rata basis. An identical clause for another $15 million applies based on the threshold through Feb. 28, 2025. And, then all bonds shall be forfeited if the threshold has not been satisfied by May 31, 2025.

Between Dec. 31, 2024 and May 31, 2025, if the threshold is satisfied for any period, the bonds will be redeemed at par within 31 days.

If all of the bonds are canceled, bondholders will receive 2.4 million warrants in the share capital of Kistos.

ABG Sundal Collier acted as financial adviser to Kistos in relation to negotiations with the bondholders and the conclusion of the transaction.

Completion of the transaction is conditioned on the receipt of regulatory approvals.

Mime Petroleum is an Oslo-based hydrocarbon development and production company. Kistos was established to acquire and manage companies in the energy sector.

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