Horizon Offshore gets $12.6 million infusion, contemplates rights offering

By Ted A. Knutson

Washington, Nov. 5 - Troubled Horizon Offshore Inc. has tried to solve its immediate cash crisis by selling $9.625 million principal of 18% subordinated notes due March 31 ,2007 at a 20% discount - for $7.7 million - to its largest shareholders Elliott Associates, LP and Elliott International, LP.

The company also tried to shore up its near-term cash requirements by obtaining from lenders an additional $4.9 million secured by the company's foreign receivables.

For a longer term answer, Horizon is considering recapitalization plan for early next year including a rights offering of additional common stock to existing shareholders and the conversion of the company's $65 million in principal value 16% subordinated notes and 18% subordinated notes to common stock.

To make the deal more attractive to Elliot, those shareholders were issued 1,400 shares of series A redeemable participating preferred stock

The two transactions came as a result of an amendment of a purchase agreement Horizon signed with investors who held $19.2 million of the subordinated notes before the sale was made to the Elliott entities.

The Elliott firms own all of Horizon's 16% subordinated secured notes due March 31, 2007.

Houston-based Horizon Offshore is a marine oil and gas exploration facilities construction company.

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