OSX Brasil submits judicial recovery plan to Rio de Janeiro court

By Caroline Salls

Pittsburgh, May 20 - OSX Brasil SA filed its judicial recovery plan with the 3rd Corporate Court of the Judicial District of the State of Rio de Janeiro, according to a news release.

The company said the plan's objective is to allow the OSX Group to overcome its economic-financial crisis, implement the measures applicable to its operational reorganization, comply with the interests and preserve the rights of creditors and shareholders.

In addition, OSX said the plan seeks to establish a settlement of its debts and the concession of new resources to enable the maintenance of OSX Group activities.

In order to achieve the desired financial and operational regeneration, the company said it is vital that the OSX Group restructure the debts contracted by pre-bankruptcy creditors through the concession of deadlines and special payment conditions for its obligations.

As the holding company of OSX Construcao Naval SA, OSX said it is again reviewing the business plan related to the development of Unidade de Construção Naval do Açu (UCN Açu) as part of the resizing of its operational activities, while maintaining activities related to naval construction.

In this context, OSX said it will seek the formalization of partnerships for the development of the area encompassed by UCN Açu, including through leasing and the formation of joint ventures with interested companies.

Also, OSX Group is in process of renegotiation of its obligations assumed in the context of OSX-3 bonds, the OSX-3 charter agreement and the OSX-3 operation agreement to allow the continuity of use of floating, production, storage and offloading unit (FPSO OSX-3) for exploration of the Tubarão Martelo Field.

The plan also includes partial demobilization of OSX Leasing, the continuity of the charter and exploration of FPSO OSX-3 and the disposal of other fixed assets.

In order to allow OSX to obtain the capital necessary to proceed with its activities, as well as the development of its business plan, the company said it may try to obtain new financing, including through the securitization and/or monetization of restructured OGX shares.

Creditor treatment

OSX said principal will be paid to unsecured creditors with a three-year grace period, meaning the first of 22 annual installment payments will be made on the third anniversary of the plan effective date.

Interest will be paid annually to the unsecured creditors beginning on the first anniversary of the effective date.

Unsecured creditors will also receive up to R$ 25,000 in 12 monthly installments.

Any labor creditors will be paid under the original terms of each obligation, or under the terms agreed between the labor creditor and OSX.

Any creditors with collateral will be treated as unsecured creditors.

Related parties claims will be settled in accordance with the plan or through the conversion of the claims.

OSX Brasil, a Rio de Janeiro-based oil and gas holding company.

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