OKEA gets unanimous approval to use escrow funds for acquisition

By Susanna Moon

Chicago, June 27 – OKEA AS obtained holder approval to amend its $150 million of 7˝% callable senior secured bonds due 2020 in connection with a planned acquisition.

As announced June 20, the company was asking holders by way of written resolution to allow it to use the remaining amount of the $110 million of proceeds that are held in escrow for the acquisition.

There were enough holders to form a quorum, and the proposed amendments were approved with 100% of the votes cast in favor, according to a notice by Nordic Trustee AS.

The issuer was also seeking to make changes to the bonds’ covenants and other adjustments.

OKEA has agreed to acquire licenses from A/S Norske Shell for a total of NOK 4.52 billion.

To finance the transaction, the company will issue $180 million of new bonds and raise $130 million from an equity offering.

By the time the acquisition closes, OKEA estimates $50 million of the $110 million of proceeds from the original bond issue that are held in escrow will have been used for development of its Yme licenses.

Since the company’s Draugen and Gjoa licenses are producing enough cash flow to cover all of OKEA’s current development needs, including Yme, the company is asking bondholders to allow it to use the remaining escrow funds to help fund the acquisition of the Norske Shell licenses.

Votes for the written resolution were due by 7 a.m. ET on June 27.

OKEA is a Trondheim, Norway-based oil and gas company.

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