Oceanteam aims to extend bonds until 2022, cut rate to 7%; meeting set

By Susanna Moon

Chicago, April 12 – Oceanteam ASA, previously Oceanteam Shipping ASA, said it has reached an agreement with a majority of holders on repaying its senior callable bonds due Oct. 24, 2017.

The proposed changes include extending the maturity to May 2, 2022 and reducing the interest rate to 7%, with 6% payable in-kind, from Libor plus 1,125 basis points, according to a notice by Nordic Trustee ASA.

A bondholder meeting has been scheduled for May 2.

The company has been holding talks with the ad hoc committee of bondholders who represent more than two-thirds of the voting bonds, the release noted.

The proposals do not include equity offerings; however, the company and its bondholders have agreed to apply upcoming proceeds from the sale of shares in the company’s vessel North Ocean 105 toward repayment of vendors and of secured lenders of Oceanteam, the release added.

As announced Nov. 28, Oceanteam was seeking to extend the maturity of its senior callable bonds due 2017 and to reduce the coupon in an effort to stave off bankruptcy.

A bondholder meeting had been set for Dec. 12 and then was canceled with no explanation given for the change.

The company then said on Jan. 11 that it had sketched the key terms of repaying its bond loan under an agreement with bondholders but needed some additional time to tie up the ends.

“We have reached an understanding to repay the bond in full, to extend the loan maturity and to reduce the cash interest costs enabling,” according to a statement by Oceanteam chief financial officer Wilhelm Bohn at the time.

The bond amendments also include the following new or amended terms:

• Monthly funding of cash interest payments to be paid in arrears to the debt service retention account;

• Deleting or amending some commitments for JV assets and their disposal;

• Allowing for security to be granted to the bondholders including a pledge over the issuer's shares in OB 101 AS and OB 104 AS;

• Imposing further reporting requirements on the issuer;

• Allowing for the bondholders to appoint a board member;

• Including a majority shareholders’ undertaking;

• Changing the face value of the bonds to $1.00 in order to facilitate the payment of pay-in-kind interest;

• Including a quarterly cash sweep mechanism;

• Deferring interest payments originally due Oct. 24, 2016, Jan. 24, 2016 and April 24, 2017 and adding the payments to the principal amount of the bonds in the form of additional bonds to be repaid at maturity;

• Removing the issuer’s call option;

• Including new provisions limiting the compensation of the issuer’s management and subordinating parts of the compensation to the bondholders claims against the issuer under the finance documents;

• Suspending gearing ratio as a financial covenant until Oct. 1, 2017;

• Including new provisions regarding the appointment of a management consultant by the bond trustee. The bond trustee will be authorized to consult with an ad hoc committee of bondholders and to rely on the instructions of bondholders holding more than two-thirds of the bonds. The management consultant will identify and effect cost reduction measures; and

• Amending listing requirements.

At the meeting, there must be at least half of the voting bond represented in order to form a quorum. To pass, the measures require at least two-thirds of the voting bonds represented.

For more details, call Wilhelm Bohn, chief financial officer of Oceanteam, at +47 47 23 64 34.

Oceanteam previously said it was in default on the bonds because it did not make the interest payment due on Oct. 24.

The bonds were issued in 2012.

Oceanteam consists of two operating segments, Oceanteam Shipping and Oceanteam Solutions. Oceanteam Shipping owns, charters and manages deep-water offshore support vessels and fast support vessels. Oceanteam Solutions provides offshore solutions. The company is based in Bergen, Norway.

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