Crudecorp seeks OK to waive change-of-control put on bonds due 2017

By Toni Weeks

San Luis Obispo, Calif., Dec. 23 - Crudecorp ASA is requesting that bondholders waive their put option on their floating-rate subordinated unsecured callable bonds due 2017, according to a notice by trustee Norsk Tillitsmann.

The company plans to complete a NOK 118.25 million private placement with investor Ymir Energi AS, following which the investor would own 57.7% of the shares in the company. As a result, Ymir Energy will put forward a mandatory offer for the remaining shares. Because Crudecorp also has entered into a $25.3 million facility with Credit Suisse, completion of the private placement would be regarded as a change of control, which will, in turn, constitute a senior event of default.

The company is proposing that the private placement and Ymir Energi's subsequent mandatory offer, as well as any addition al purchases or subscriptions of shares resulting in Ymir Energy becoming owner of up to 100% of all outstanding shares, not constitute a relevant change of control. Specifically, it is asking bondholders to waive their put option under clause 10.3 of the bond agreement.

The proposal represents an attractive solution for the bondholders, as it would allow Crudecorp to secure financing of its short-term needs and avoid a breach of covenants on Dec. 31 related to the facility, the company said in the notice.

Bondholders are being asked to vote on the proposal at a meeting in Oslo on Jan. 13. Bondholders representing more than two-thirds of the outstanding bonds must be represented in person or by proxy at the meeting. In order to form a quorum, at least half of the voting bonds must be represented at the meeting.

Crudecorp informed the bond trustee that bondholders representing more than two-thirds of the outstanding bonds have committed to vote in favor of the proposal at the meeting.

Stavanger, Norway-based Crudecorp is an oil and natural gas exploration and production company with offices in Houston and Bakersfield, Calif.

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