Indonesia’s KrisEnergy gets shareholder support to restructure notes

By Susanna Moon

Chicago, Dec. 27 – KrisEnergy Ltd. said it met the conditions for restructuring its S$130 million of 6¼% notes due 2017 and S$200 million of 5¾% notes due 2018 at meetings after obtaining shareholder approval on Tuesday.

As a result, KrisEnergy will pay the early bird consent fee on Jan. 6, according to a company update. The notes exchange record date is Jan. 5.

The company previously announced that bondholders had voted in favor of the restructuring at meetings held at 8:30 p.m. ET on Dec. 8 in Singapore.

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

As of the extended early bird consent deadline of 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 previous 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 early bird 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 company expected 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 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 will be up to 7%, comprising a mandatory cash coupon of 4% from the fifth coupon payment onwards and an additional coupon of up to 3% linked to oil prices.

The company was also asking holders to waive events of default under the trust deed for 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.

© 2015 Prospect News.
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