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Sevan Marine enters agreement to issue $36.1 million 15% bonds at 97
By Jennifer Chiou
New York, July 20 - Sevan Marine ASA announced that it entered into an agreement with Norsk Tillitsmann ASA to issue $36.1 million of 15% bonds at a discounted price of 97.
Norsk Tillitsmann is acting on behalf of a group of holders of the company's existing bonds, according to a news release.
Proceeds from the offering are slated for short-term working capital needs into September. This is pending a final resolution of the ongoing restructuring discussions with bondholders and other stakeholders.
On June 22, the company said that it was in the process of seeking a restructuring of its debt, noting that it had secured an extension of the grace period for the June 22 payment of the interest due on its NOK 700 million of senior bonds.
According to a prior release, the company and its subsidiaries were continuing to explore measures to address their immediate liquidity needs.
At least $30 million from the planned offer will be used for the FPSO Sevan Voyageur upgrade project.
The coupon will be payable upon repayment of the bonds, which will come due in July 2012. The securities may be called at any time at 107.5% of par during the first six months and thereafter at 103.75%.
The release added that the bonds are subject to mandatory redemption upon the completion of a long-term restructuring resolution in which the company raises new capital in an amount of at least $175 million.
The bonds will be secured by a first-priority pledge over the company's shares in Sevan Drilling ASA.
The completion of the issue is subject to, among other things, stand-still agreements with the bank financiers and charterers of the FPSO Sevan Voyageur until the end of September.
Sevan Marine said that it is "optimistic that a long-term solution to the current financial challenges" will be reached by the end of September.
Sevan Marine is a Norwegian offshore drilling company.
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