Point gets support to call 8˝% bonds at 115.044, adds one-time fee

By Susanna Moon

Chicago, Nov. 9 – Point Resources AS has passed its amended written resolution under the $300 million of 8˝% callable senior bonds due 2024 on Friday with approval by the required majority, according to a notice by Nordic Trustee AS.

The issuer amended its notice of written resolution after opposition to its original notice from some bondholders and gained the support of 69.1% of holders, according to the amended notice on Friday.

As announced Oct. 23, the issuer was asking for holder approval to call the bonds in connection with a planned merger with Eni Norge AS, which will result in a change of ownership under the note terms and constitutes a technical breach.

The voting deadline by written resolution was 7 a.m. ET on Nov. 6 and then was extended until 7 a.m. ET on Nov. 26.

Specifically, the issuer was looking to call the bonds to avoid being in technical default under the note terms, which require Point Resources Holding AS to maintain 100% direct control and ownership of the company, according to a previous notice.

The price for redeeming the bonds under the merger call option is 115.044% of par plus accrued interest. The call price is based on the U.S. Treasury plus a make-whole premium of 50 basis points.

The issuer then added a one-time amendment fee of 1.5%.

The issuer originally proposed that if the call is not approved by the required majority, the company would hold a conditional tender offer for the bonds at a price of 114.69%, which is based on the U.S. Treasury plus a make-whole premium of 65 bps.

The call price and tender price assume a settlement date of Dec. 10 and use Treasury rates as of the close of business on Oct. 19.

Finally, if the company is unable to repurchase the bonds by either the call or tender offer, the company will transfer a “sufficient” amount to a defeasance account.

Under the terms of the merger, the surviving company would be renamed Var Energi AS and be jointly owned by Eni with a 69.6% stake and HitecVision with a 30.4% stake.

The bonds were issued March 19, 2018.

Pareto Securities AS is the financial adviser.

Bondholder resolution

As announced Nov. 2, the trustee issued a notice of written resolution under the 8˝% bonds after being requested to do so by holders of at least one-tenth of the bonds.

Bondholders representing 50% of the bonds have told the trustee that they are opposed to the written resolution and, in the alternative, do not plan to tender their notes in any offer, according to a previous notice by Nordic Trustee.

Instead, the holders of at least one-tenth of the bonds are looking to hire a law firm to advise the trustee with the third option proposed, which is setting up a defeasance amount under the bonds.

The deal is set to close between Dec. 10 and Dec. 21, and the sum of all principal and future interest on the bonds will be about 150% of par, the trustee said on Friday.

Any defeasance amount that is less than 150% of par would be inadequate “to relieve the issuer of its obligations” and the closing of the merger would constitute a default under the note terms, the trustee said.

The bondholder proposed resolution will run until 7 a.m. ET on Nov. 20.

Point is an oil and gas exploration and production company based in Sandnes, Norway.

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