Metro Exploration bondholders approve plan to distribute payments

By Wendy Van Sickle

Columbus, Ohio, March 30 – Holders of Metro Exploration Holding Corp.’s senior secured callable bonds due 2016 unanimously passed proposals relating to the distribution of cash held by direct subsidiary Deep Sea Metro Ltd. and to the manner in which payments are applied in satisfaction of due and payable claims under the bonds, according to a notice from bond trustee Nordic Trustee ASA.

The meeting was held in Oslo at 1 p.m. ET on March 30.

The two proposals were separate, and bondholders could cast differing votes on the resolutions. To pass, each required support from holders of two-thirds of the bonds represented at the meeting. To achieve a quorum, at least half the bonds had to be represented at the meeting. Each proposal received 100% of the votes cast at the meeting, according to Wednesday’s notice.

The proposals include the following:

Distribution and release

The company said that its largest bondholders have been cooperating for months with holders of the largest bonds of its indirect subsidiaries Golden Close Maritime Corp. Ltd. and Chloe Marine Corp. Ltd. with a view toward preserving their respective rights and maximizing their recoveries under the bonds during a time of distress for the issuers.

During this period, certain cash deposits totaling $19.8 million as of March 11 have been retained in Deep Sea’s bank accounts.

In the first quarter of 2016, Nordic Trustee, Metro, Deep Sea and Deep Sea’s other shareholder Odfjell Offshore Ltd. agreed that Deep Sea should distribute the cash to its two shareholders on a prorated basis, with 60%, or $11.88 million, going to Metro and 40%, or $7.92 million, to Odfjell.

Once the issuer’s portion has been received, it along with any other amounts standing to the credit of Metro’s account, which totaled about $4.09 million on March 11, are to be transferred to the trustee for distribution to the bondholders on a prorated basis in partial satisfaction of their due and payable claims. The portion of claims not covered by the distribution would remain outstanding.

Metro will retain an amount from its available cash to meet the general corporate purpose needs of it and its parent entities, to cover fees and expenses of Nordic Trustee and its advisers and to cover expenses that will be incurred during the eventual wind-down of Metro and its parent entities. The release would not affect claims the bond trustee may have against Golden Close or Chloe Marine.

Contingent upon making the distribution, the trustee, Metro, Odfjell and Deep Sea agreed to grant a mutual release of all claims and liabilities that may arise on any basis between the parties up to the date of the distribution.

In order for the distribution to be made as soon as possible, the parties have entered into a release agreement, conditioned upon the distribution being made before March 31 and the bondholders formally approving the release.

The trustee had already received instructions from holders of more than the necessary two-thirds of the bonds to approve the resolution. However, to become effective, the release had to be formally ratified at the meeting. In addition to granting the release, this first proposed resolution also grants Metro permission to make the distribution to bondholders.

Application of payments

This proposal requested bondholders to approve

• All payments made in regards to their claims being applied to principal first, in priority to accrued interest;

• Repayment on principal of the bonds made after March 11 to be made at face value with no premium; and

• A disapplication of any requirement to repay the bonds in their entirety or with any call premium.

The resolution instructs the trustee to take all necessary steps on behalf of the bondholders to implement these payment arrangements.

Metro Exploration is a holding company with no business activity or assets other than a 60% ownership interest in Deep Sea Metro Ltd., which owns and operates two oil drillships. Chloe Marine and Golden Close are Deep Sea Metro’s wholly owned subsidiaries.

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