Island Offshore Shipholding bondholders OK restructuring proposal

By Caroline Salls

Pittsburgh, Dec. 14 – The holders of Island Offshore Shipholding LP’s tranche A senior unsecured callable bond issue 2013/2018 and tranche B senior unsecured callable bond issue 2016/2019 approved the company’s restructuring agreement at a meeting held Thursday, according to a notice released by bond trustee Nordic Trustee AS.

The restructuring was approved by 94.59% of voting tranche A bondholders and 100% of voting tranche B bondholders.

As previously reported, the restructuring covers the period from June 30, 2017 through Dec. 31, 2020. During this time, the group’s service of debt to secured lenders will be amended.

Under the restructuring, facility agreement maturities and related guarantees will be extended to Dec. 31, 2020.

Outstanding principal installments due as of June 30 will be deferred.

An amended amortization schedule will be established for the restructuring period.

Separate cash sweep provisions will be included to secure the applicable secured lenders’ additional amortization if group members perform better than expected during the restructuring period.

A NOK 75 million guarantee issued in favor of the secured lenders for the financing of the Frontier and Wellserver vessels by way of cash sweeps will be redeemed.

Parent company guarantees to the IO X group member will be put on hold during the restructuring period. However, if the IO X vessels do not generate enough cash to cover operating expenses, capital expenses and interest requirements, the parent company will cover the shortfall.

No amendments will be made to interest payment provisions, and no further drawdowns will be made under any facility agreement. Any undrawn commitments will be cancelled, retroactive to June 30.

In addition, the group’s principal owners and minority shareholders will contribute a total of NOK 369 million in cash as part of the restructuring.

All NOK 223 million of uncalled capital will be repaid, and NOK 62 million will be used to repay intra-group debt.

The notice said NOK 51 million will stay with the issuer to improve its working capital.

Under amendments to the bond agreement, the tranche A and tranche B bond maturity dates will be extended to June 30, 2021.

In the period between the agreement date and the final maturity date, the cash interest on the bonds will be amended to reflect that, from June 30 through the final maturity date, the cash interest rate on the bonds will be fixed at 1¼%.

The existing payment-in-kind interest will continue, and no additional PIK element will be included as part of the restructuring.

If the date of agreement is not reached by Jan. 5, the cash interest payment due on that date will be made on the next interest payment date without any compensation for the delayed payment.

The vessel investment company is based in the Cayman Islands.

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