Noreco seeks waiver and consent from holders of four bond series

By Jennifer Chiou

New York, Oct. 3 - Norwegian Energy Co. ASA (Noreco) is seeking a temporary waiver and consent to proposed amendments from holders of several series of its bonds, according to a notice from trustee Norsk Tillitsmann.

The following securities are affected:

• 12.9% senior secured callable bonds due 2014 with ISIN 001054844.9;

• Senior unsecured bonds due 2013 with ISIN 001059230.6;

• Senior secured bonds due 2016 with ISIN 001060632.0; and

• Senior secured bonds due 2016 with ISIN 001060633.8.

A bondholders' meeting is set for Oct. 19 in Oslo.

The notice stated that Noreco has gone through a financial and operational repositioning since 2011. Combined with the start of production at Huntington Field, the company said that it will be challenged to adhere to the ratio covenants contained in the bond agreements.

Further, Noreco's reserve-based loan facility does not provide sufficient flexibility on the group level, the notice added.

With that, the company is seeking holder consent to amend the book equity covenant in the bond agreements and a waiver for certain ratio covenants.

Noreco said it has launched an NOK 400 million equity issue and a NOK 300 million bond offering to strengthen its balance sheet and to provide the liquidity needed to cover the repayment of its remaining NOK 475.5 million floating-rate senior secured callable bonds due Nov. 20, 2012.

The company is offering a consent fee of 1% of the face value of bonds for those who consent.

Holders of at least two-thirds of the bonds must be present at the meeting in person or by proxy to form a quorum.

The amendment proposal is subject to approval of the equity issue at a general meeting anticipated for Oct. 26.

Noreco is a Stavanger, Norway-based energy company.

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