Indonesia’s KrisEnergy noteholders approve restructuring at meetings

By Angela McDaniels

Tacoma, Wash., Dec. 9 – KrisEnergy Ltd. bondholders voted in favor of restructuring its S$130 million 6¼% notes due 2017 and S$200 million 5¾% notes due 2018 at meetings at 8:30 p.m. ET on Dec. 8 in Singapore.

As of the earlybird consent expiration date, 4 a.m. ET on Nov. 29, the quorum requirements for each series of notes had been met and more than 75% of the votes cast for each series of notes were in favor of the resolutions.

As of the extended earlybird consent expiration date, 4 a.m. ET on Dec. 2, holders had submitted voting instructions for S$104.25 million of the 6¼% notes, representing approvals for 80.2% of the notes, and S$156.75 million of the 5¾% notes, representing approvals for 78.4% of the notes, according to a prior announcement.

The consent deadline was 8:30 p.m. ET on Dec. 6 for the 6¼% notes and 9:30 a.m. ET on Dec. 6 for the 5¾% notes.

The earlybird consent fee is 50 basis points. There is no other consent fee.

The company plans to issue up to S$140 million of zero-coupon secured notes with warrants in a preferential offering. The completion of the consent solicitation is conditioned on, among other things, shareholder approval of the preferential offering at a meeting that is expected to be held Dec. 27.

The company said it will announce the date for payment of the earlybird consent fee as soon as it can after the shareholder meeting.

The company expects the settlement date for the exchange offer to be Dec. 27 and the settlement date for the zero-coupon secured notes to be Jan. 13.

The company sought noteholder approval to exchange the existing notes for new senior unsecured notes.

These new notes will have maturity dates five years longer than the maturity dates of the existing series being exchanged. Coupons for the new notes would be up to 7%, comprising a mandatory cash coupon of 4% from the fifth coupon payment on and an additional coupon of up to 3% linked to oil prices.

The company is also asking holders to irrevocably waive any and all existing events of default or potential events of default under the existing notes trust deed and the terms and conditions of the existing notes that may have occurred or may occur as a result of the adoption of the proposed restructuring plan.

The company also wants to replace existing financial maintenance covenants with a debt incurrence covenant.

“This restructuring is essential for the survival of KrisEnergy and without which there is no guarantee that the company can continue to operate and meet its various obligations. The consent solicitation is a critical element of the restructuring and is aimed at providing the company with a stable and sustainable capital structure and an enhanced liquidity position,” Jeffrey S. MacDonald, KrisEnergy’s interim chief executive officer, said in the release announcing the solicitation.

“There has been no sustained improvement of any magnitude in oil prices, and markets remain volatile. Our liquidity is severely limited despite the steps we have taken over the last 18 months to counter external factors out of our control that impact our ability to execute our business plan.”

Standard Chartered Bank (+65 6596-9645) is the solicitation agent. Tricor Singapore Pte. Ltd. (+65 6236-3550, +65 6236-3555 or corporateactions@sg.tricorglobal.com) is the tabulation agent.

The issuer is a Jakarta-based oil and gas company.

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