Havyard Group seeks to extend, amend NOK 150 million of bonds due 2017

By Wendy Van Sickle

Columbus, Ohio, June 16 – Havyard Group ASA is seeking to amend its NOK 150 million of senior unsecured bonds, issue 2014/2017, to extend the bonds and increase their interest rate, among other things, amid the decline in the oil industry, according to a notice from trustee Nordic Trustee ASA.

Havyard said that, as a result of market trends and expected continued declines in demand, it has implemented several measures, including reducing its workforce by about 100 full-time employees.

This year, it said, will be difficult for its sector that focuses on construction of offshore vessels, as demand has fallen while potential customers’ decisions are delayed during oil’s uncertainty.

Havyard said that in recent years it has branched out into the windmill service ship, ice-breaker vessel and aquaculture markets, which the company said has been costly but has laid the groundwork for the way forward.

Because of the funds it has tied up in these new endeavors, Havyard said it is proposing to make the following changes, among others, to the bonds:

• Increasing the interest rate to 7% from 5½%, which would be effective on approval of the proposal;

• Extending the bonds’ tenor by 18 months to Dec. 13, 2018 from June 13, 2017; and

• Providing for the issuer to prepay the bonds in quarterly installments starting on the interest payment date in June. The installments would be pro rated at 100% of par in an amount of NOK 8,213,385, or 6¼% of the outstanding bonds;

• Introducing a call option for the issuer to redeem some of the bonds at par plus accrued interest from March 13, 2018 to the new maturity;

• Reducing the maximum borrowing limit to NOK 150 million;

• Introducing a cash sweep repayment mechanism; and

• Splitting the 300 bonds with a face value of NOK 500,000 into 150,000,000 bonds with a face value of NOK 1 in order to facilitate an exchange offer.

The proposed amendments are set to be put to a vote at a bondholders meeting at 7 a.m. ET on June 30 in Oslo.

The resolution requires approval of two-thirds of the voting bonds represented at the meeting for passage. To establish a quorum, a minimum of 50% of the voting bonds must be represented.

Financial adviser Fearnley Securities AS (attn.: Per Lauvang: +47 22 93 6377 or p.lauvang@fearnleys.no) can be contacted for information.

Exchange offer

Within one month of the meeting, the issuer said it will offer to all bondholders to exchange a portion of their bonds for Havyard shares. In total, it will offer to issue about 2,252,830 new shares at a subscription price of NOK 8.25 under the exchange.

Havyard said it has entered into guarantee agreements with holders implying about NOK 18.59 million of the bonds will be exchanged under the offer.

The fully integrated ship technology company’s headquarters are in Fosnavag, Norway.

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