NBT holders vote in favor of amending 14% senior secured bonds

By Marisa Wong

Madison, Wis., March 26 - NBT AS bondholders voted in favor of a resolution to amend NBT's 14% senior secured callable bonds, issue 2010/2013, according to a notice from trustee Norsk Tillitsmann ASA.

A bondholders meeting was held on Wednesday with sufficient bondholders present to form a quorum. The proposed resolution obtained 97.24% of the votes, enough to amend the bond agreement.

As announced on March 12, NBT sought bondholder authorization to formally delete a clause involving the mandatory redemption of the 14% bonds in the event of exercise of warrants.

Background

According to a prior notice from Norsk Tillitsmann, holders approved several changes to the bonds in February after the issuer reported that it did not have the funds to repay the bonds at maturity on March 10, 2014.

As part of those proposals, the company explained its funding needs and planned investments and said in the notice that it was an oversight to have not deleted the clause involving mandatory redemption of the securities.

As reported, NBT established an underwriting syndicate that was to offer to acquire warrants that otherwise were to lapse following their expiry on Feb. 24, adding that the syndicate would exercise any warrants it acquires. The company aimed to raise NOK 100 million through the warrant exercise.

NBT said that it was clear that the proceeds from the exercise of the warrants should be used to fund investment commitments and ongoing operations - not for any bond redemptions.

There was, however, a minority of holders representing more than 10% of the outstanding bonds that did not consent to prior proposals. These holders stated in a letter to other bondholders that one of the uses for proceeds from the warrants is the redemption of the bonds.

As reported, the amount due on March 10 was to be NOK 128.75 million plus accrued interest. Holders authorized the extension of the maturity date as well as other changes to the bond agreement.

Of the bondholders who formed a quorum at the February meeting in Oslo, 89.23% voted in favor of the following changes:

• Extend the bonds' maturity date to June 30, 2015. The maturity price and the call price would remain unchanged at 103% of par plus accrued interest;

• Make interest payable in kind from Dec. 30, 2013 onward;

• Increase the number of days it has to make its financial statements available to 180 days after the end of the financial year from 150 days;

• Make interest payments on its convertible bonds due 2015, the first interest payment being Sept. 14, 2014;

• Repay NOK 31.2 million of short-term loans from the company's chief executive officer, Joar Viken. Specifically, the company wants approval (a) to repay NOK 7.95 million of the loans immediately, NOK 5 million during the second half of 2014 and whatever amount is needed to allow Viken to participate in the underwriting syndicate and subscribe for any leftover warrants and (b) to make interest payments each year on the remaining loans until their maturity, which would be postponed until Oct. 1, 2015;

• Incur the up to NOK 40 million bridge loan or working capital facility; and

• Amend the definition of "permitted financial indebtedness" in the bond agreement so that it will not be a cross default if the company fails to pay interest on any of its permitted financial debt.

Most recently, the minority bondholders proposed that short-term loans should be extended to June 2015 with PIK interest and proceeds should be used to buy back their bonds at par.

Upon summoning the latest meeting, NBT said that holders of more than two-thirds of the bonds would vote in favor of the current proposal.

The issuer is an Oslo-based project company focused on windpower and biomass projects.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.