Norshore 12% bondholders approve appointment of financial advisers

By Marisa Wong

Madison, Wis., May 22 – Norshore Atlantic BV’s bondholders approved a proposal affecting the company’s 12% callable bonds, issue 2014/2018, at a meeting held on Friday, according to a notice from bond trustee Nordic Trustee ASA.

There were sufficient bondholders present at the meeting to form a quorum, and the resolution obtained 96.09% of the votes.

As previously reported, Norshore breached one covenant under the 12% bond agreement and will likely breach another, so the bond trustee called a bondholders meeting to obtain bondholder approval for the appointment of advisers and other aspects of the funding arrangement.

According to a prior notice from Nordic Trustee, the issuer and its advisers entered into discussions in March with an ad-hoc committee of select bondholders with respect to a corporate restructuring proposal.

At the same time, the committee and Nordic Trustee together initiated preparations to appoint financial and legal advisers to assist the bondholders with, among other things, conducting business due diligence, legal matters and negotiations with the issuer and other stakeholders.

The notice said that Norshore already breached the retention account covenant under clause 13.5 (b)(i) of the bond agreement, which caused an event of default. And the company is likely to breach the minimum free liquidity covenant in clause 13.4(a)(i) of the agreement. Furthermore, Norshore has not yet made its financial statements available on its website, as required in clause 13.2.1 (c) of the agreement.

The company, a Bergen, Norway-based drilling contractor providing services to oil and gas production companies, said that the decline in oil prices and resulting cautious spending by oil companies has negatively impacted its business opportunities. During the first half of 2015, the contract periods for the vessel have been shorter, and the vessel’s idle time has increased, adversely affecting cash flow and the issuer’s cash position.

In the discussions between Nordic Trustee and the committee, it was concluded that the trustee should retain financial and legal advisers as soon as practically possible to ensure that the interests of the bondholders are fully represented. In addition, AMA Capital Partners was selected as a financial adviser, Cadwalader, Wickersham & Taft LLP as international legal counsel and Advokatfirmaet Thommessen AS as Norwegian legal counsel.

Bondholders representing more than 50% of the voting bonds had approved the appointments and agreed to vote in favor of them at the May 22 bondholders meeting.

To approve the appointment of the advisers and to authorize Nordic Trustee to take steps as necessary on behalf of the bondholders, bondholders representing at least half of the bonds represented in person or by proxy at the meeting had to vote in favor of the resolution. In order to have a quorum, at least half of the voting bonds had to be represented at the meeting.

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