Marine Subsea seeks consents to cancel 9% bonds in restructuring

By Jennifer Chiou

New York, Dec. 5 - Marine Subsea Cyprus Holding Ltd. announced a revised restructuring for its 9% bonds due 2019 after holders unanimously voted to amend the securities at the end of November.

At a Dec. 13 meeting, holders will now be asked to forgo the planned bond purchase agreement, and Marine Subsea will look to cancel and discharge the securities upon completion of the revised restructuring, which is anticipated for Dec. 20.

The meeting will take place in Oslo, according to a notice by Norsk Tillitsmann. The company is seeking consents from holders of two-thirds of the bonds represented at the meeting. A quorum will be reached if holders of at least half of the notes are present or represented by proxy.

Holders will also be asked to authorize revised allocation dates.

As previously noted, holders were asked to waive and release any and all claims against trustee Norsk Tillitsmann, and the company incorporated a new silent limited partnership under the name Offshore Accommodation IS, with Offshore Accommodation AS as its general partner.

Offshore Accommodation was formed to purchase three offshore barges, and Pareto Project Finance AS received indicative commitments for $74 million to enable Offshore Accommodation to acquire the barges from some Marine Subsea Cyprus subsidiaries.

A previous notice said that Pareto had exhausted its financing possibilities.

Marine Subsea Cyprus originally proposed that some of its shares and debt owed by subsidiaries be transferred to a newly formed entity, African Offshore Services AS. The purchase price was to be $90 million in cash.

Fees were estimated at roughly $2 million in addition to a maximum $15 million payment to Jaya Shipbuilding and Engineering Pte. Ltd. for Jaya to release its pledge over the shares of Marine Subsea Worker Pte. and the mortgage covering the African Worker barge.

Holders were expected to receive a cash payment of about $73 million.

In addition, the company was to pay $150,000 per week from the Aug. 31 first-summons date until the restructuring is complete. The additional amount had accumulated to $1.65 million as of a previous notice, which was to be paid to the trustee.

Bondholders were asked to consider the revised restructuring proposal to provide for the $74 million to be paid by Offshore Accommodation for the barges in addition to 40% of the partnership shares, which would be distributed to bondholders.

Based on the revisions, the additional amount was roughly equal to bondholder costs, leaving a cash amount of about $59 million to be distributed to holders.

Following the payment, the principal amount of the bonds will be reduced by $75 million.

Marine Subsea also previously proposed that $16 million of shares be issued to bondholders.

The company originally issued $246 million of the bonds. Marine Subsea AS is the parent guarantor.

Questions may be directed to Fredrik Lundberg at 47 22 87 94 24 or Lundberg@trustee.no.

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

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