Marine Subsea bondholders to vote on pursuing claim against shipyard

By Angela McDaniels

Tacoma, Wash., Oct. 29 - The holders of Marine Subsea Cyprus Holding Ltd.'s series II senior secured bonds due 2019 will vote on whether to pursue litigation that could yield as much as $78 million, according to a notice from bond trustee Norsk Tillitsmann ASA.

The bonds had a first-priority share pledge in the issuer's shares in Marine Subsea & Consafe Ltd. Marine Subsea Cyprus invested about $40 million in Marine Subsea & Consafe, which allowed the latter to order a semisubmersible crane vessel. According to the notice, neither the vessel nor a second upgraded unit were ever delivered to Marine Subsea & Consafe.

Marine Subsea Cyprus maintains that it has a right to a claim against the shipyard, Yantai, and the other parties involved. Yantai denied that Marine Subsea & Consafe has a right to the claim, and as a result of Marine Subsea Cyprus's limited liquidity, it has not pursued this claim.

In April, it was reported that Yantai sold the original semisubmersible crane vessel and the upgraded unit for $522 million. Marine Subsea Cyprus' current owner, African Offshore Holding Ltd., believes that a claim can be pursued and that compensation could be as much as $78 million.

Marine Subsea Cyprus is insolvent and is currently undergoing liquidation proceedings in Cyprus. The notice said the company's former parent, Marine Subsea AS, is in bankruptcy and has indicated no interest in pursuing a claim against Yantai.

AOS Cyprus Holding Ltd. is proposing an agreement under which AOS would provide the funding to pursue potential litigation claims and any subsequent recoveries would be shared on an equal basis between AOS and the bondholders.

Bondholders will vote on the proposal at 8 a.m. ET in Oslo on Nov. 14.

At least half of the bonds must be represented at the meeting in order to form a quorum, and the holders of at least two-thirds of the bonds represented at the meeting must vote in favor of the proposal in order for it to pass.

Oslo-based Marine Subsea Cyprus is an offshore support company with a main focus in West Africa.

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