Nexus offers conditional payment in exchange for termination of bonds

By Angela McDaniels

Tacoma, Wash., Dec. 22 - Nexus Floating Production Ltd. wants its bondholders to agree to the termination of their bonds in exchange for a promise to make a $15 million conditional payment in the future, according to a notice from bond trustee Norsk Tillitsmann ASA.

The company's $37,956,000 of residual bonds, issue number one, and $29,069,000 of residual bonds, issue number two, are scheduled to mature on March 7, 2012.

The company supplies harsh-environment floating production, storage and offloading vessels. It has one vessel, the Nexus #1. Construction of its second vessel, the Nexus #2, has been put on hold until a customer is in place. The construction contract with Samsung Heavy Industries for Nexus #2 has been suspended, and the deferral period ends on Feb. 28.

Nexus is proposing that the bondholders agree to the termination of the bonds and waive their rights to be paid principal and interest. If the Nexus #2 contract is restarted or if the rights and benefits under the Nexus #2 contract are transferred to a third party, the company will make a $15 million pro rata payment to the bondholders.

If the Nexus #2 contract is terminated, the bondholders' rights to receive the conditional payment will terminate and the bondholders will not be entitled to any payment from the company.

The conditional payment is 22.4% of the bond's $67,025,000 outstanding principal amount.

Bondholders will vote on the proposal at a meeting in Oslo at 6 a.m. ET on Dec. 30.

For each series, the holders of at least two-thirds of the bonds represented in person or by proxy at the meeting must vote in favor of the proposal in order for it to pass. At least half of each series of bonds must be represented at the meeting in order to have a quorum.

Bondholders who plan to attend are asked to contact the trustee at 47 22 87 9400 or post@trustee.no by 10 a.m. ET on Dec. 29.

Nexus is located in Singapore and has a project office in Arendal, Norway.

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