UAE’s Telford gets OK to access blocked cash under tranche A1 bonds

By Susanna Moon

Chicago, Oct. 24 – Telford Offshore Ltd. obtained the needed majority of votes to amend its tranche A1 bond issue 2018/2019 and its tranche A2 bond issue 2018/2019 by way of written resolution, according to a notice by Nordic Trustee AS.

The voting deadline is 7 a.m. ET on Oct. 26.

As announced Oct. 19, the tranche A bondholders were being asked to consider the issuer’s request to release and pay the issuer about $10.1 million of the amount standing to the credit of the blocked cash account.

The group’s business plan was issued in February as part of the proposal for the restructuring and showed that some additional funding would be required during the fourth quarter, according to a previous notice.

As part of the process of issuing the tranche A1 bonds, an escrow account was opened with DNB Bank ASA into which the holders of the tranche A1 bonds deposited $10 million, or the subscription proceeds for the issue of the tranche A1 bonds. The account operates as a blocked cash account and the issuer does not have access to the amount standing to the credit of the blocked cash account of about $10.1 million.

The bond agreement states that the blocked cash will be applied in the redemption of the tranche A bonds under the cash sweep provisions, upon maturity of the tranche A bonds or on any earlier call date, or may otherwise be released with the consent of a bondholder meeting of the tranche A bondholders.

“While there was no certainty that the blocked cash would subsequently be released to the issuer at the time it was deposited into the blocked cash account, each of the business plan, its principal outputs and the group’s subsequent financial planning were based on the issuer’s assumption that the blocked cash would be released to it during 2018 should the group’s liquidity position so require,” the notice said.

To pass, the proposal required votes representing a majority, or 50% of the voting bonds.

Telford is an oil and gas company based in Dubai.

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