Metro Exploration bondholder group seeks approval to engage advisers

By Angela McDaniels

Tacoma, Wash., Aug. 20 – Metro Exploration Holding Corp.’s bondholders will vote on whether to engage legal and financial advisers to provide advice about the preservation and enforcement of their rights and interests, according to notices from bond trustee Nordic Trustee ASA.

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. Deep Sea Metro has two wholly owned subsidiaries, Chloe Marine Corp. Ltd. and Golden Close Maritime Corp. Ltd.

The proposal to hire the advisers is being made by a group of bondholders that holds more than 50% of Metro Exploration’s senior secured callable bonds due 2016, more than 50% Chloe Marine’s 12% second-lien callable bonds due 2016 and more than 50% Golden Close Maritime’s 9% senior secured callable bonds due 2019. The fees of the advisers would be paid by the issuers.

The holders of each series will vote at a meeting in Oslo on Sept. 3 on whether to engage Akin Gump LLP as restricting legal adviser, Schjodt as Norwegian law legal adviser and AMA Capital Partners LLP as financial adviser.

For each series, at least 50% of the bonds must be represented at the meeting in order to form a quorum, and the holders of at least 50% of the bonds represented at the meeting must vote in favor of the proposal in order for it to pass.

Background

As previously reported, Deep Sea Metro has not been able to make distributions to its shareholders, blaming the decline in oil prices and a resulting reduction in business activity and rates.

Metro Exploration has been exploring restructuring alternatives and discussing options with a group that controls more than two-thirds of its bonds.

On May 29, Metro Exploration received a waiver from its bondholders and approval of a transaction that has since transferred ownership of parent company Metro Drilling Holding Corp. to the bondholders in return for the settlement of some intra-group loans.

The temporary waiver waived the requirement that Metro Exploration have enough funds in the interest reserve account to cover two interest payments.

As of May 13, the issuer intended to make the interest payment due on May 15 but said it did not expect to be able to satisfy its obligation to fund the interest reserve account in May.

The waiver applied to the funding obligation due May 15 but not to subsequent funding dates, the next of which was Aug. 17.

In addition, Metro Exploration redeemed $4,891,470 of its bonds due 2016 on June 8 at a price of 101.5 plus accrued interest for a total of $5 million.

The redemption left $181,108,530 principal amount of the bonds outstanding.

© 2015 Prospect News.
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