Havyard Group to issue shares in exchange for NOK 18.59 million bonds

By Angela McDaniels

Tacoma, Wash., July 25 – Havyard Group ASA will issue shares in exchange for NOK 18,585,848 of its senior bonds due 2017, according to a company announcement.

The company offered to issue up to 2,252,830 new shares at a subscription price of one share per NOK 8.25 principal amount of notes tendered. Bondholders were entitled to subscribe for shares in the exchange offer on a pro rata basis.

The company entered into guarantee agreements with some bondholders implying that at least NOK 18,585,848 of the bonds would be converted to equity through the exchange offer. As compensation for the guarantee undertaking, the guarantors were promised a fee equal to 2.5% of the guaranteed amount.

The exchange offer ended on July 20.

The company received applications for a total of NOK 3 million, corresponding to 363,600 new shares, and the board of directors decided to call on the guarantee for an additional 1,889,230 shares. As a result, the company will allocate a total of 2,252,830 new shares in the exchange offer and NOK 18,585,848 of the bonds will be set-off and canceled.

The company will pay accrued interest up to and including the payment date in cash.

Settlement is expected to take place on or about Aug. 23.

As previously reported, at a meeting held June 30, the company received bondholder approval to make the following changes to the bonds:

• Extend the maturity date to Dec. 13, 2018 from June 13, 2017;

• Allow the issuer to prepay the bonds in quarterly installments beginning in June. The installments are prorated at 100% of par in an amount of NOK 8,213,385, or 6¼% of the outstanding bonds;

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

• Reduce the maximum borrowing limit to NOK 150 million;

• Include a cash sweep repayment mechanism; and

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

In return, the company agreed to raise the interest rate to 7% from 5½%.

Fearnley Securities AS acted as manager of the exchange offer.

The integrated ship technology company is based in Fosnavag, Norway.

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