Blom seeks another extension of its 15% bonds, this time to 2014

By Angela McDaniels

Tacoma, Wash., April 12 - Blom ASA is seeking bondholder approval to extend the maturity of its 15% senior secured bonds to April 30, 2014 from April 26, 2013.

The main objective of the extension is to "safeguard values and secure an improved basis for future repayment" of the bonds, according to a notice from bond trustee Norsk Tillitsmann ASA.

In addition to the maturity extension, the company's proposal includes the following changes:

• Interest will be paid on the maturity date and will be calculated to April 30, 2014 even if the maturity date occurs earlier that April 30, 2014;

• The definition of mandatory prepayment event will be expanded to include (a) other creditors demanding repayment of the company's debt through the realization of the assets pledged in favor of them and (b) Blom carrying out a merger or other business combination or corporate reorganization involving consolidating its assets and obligations.

The current mandatory prepayment events are a change of control, a sale of all or substantially all of the company's assets and any share issue other than in connection with employee incentive schemes or the issue of consideration shares in a transaction;

• If the company holds more than NOK 50 million of free cash on the last day of a quarter, it will use the excess amount to prepay the bonds on a pro rata basis at par plus accrued interest plus the interest that would have been paid through maturity; and

• The company will have the right to redeem the bonds at par plus accrued interest plus the interest that would have been paid through maturity.

Bondholders will vote on the proposal at a meeting in Oslo on April 26.

In order to form quorum, at least half of the bonds need to be represented at the meeting. Of those, a two-thirds vote is needed in order to adopt the proposal.

The bondholders voted on April 10 to extend the maturity to April 26, 2013 from April 4, 2013. On Feb. 22, they voted to extend the maturity to April 4, 2013 from Feb. 21, 2013, and on Dec. 21, they voted to waive a negative pledge covenant in the note agreement.

By waiving the covenant, the bondholders allowed Blom Data AS to pledge its machinery and plant as security for up to €3 million from one of its shareholders.

Oslo-based Blom provides geographical information and services.

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