Capital/Financing Update • Dec 5, 2019
Capital/Financing Update
Open in ViewerOpens in native device viewer
Denne melding til obligasjonseierne er kun utarbeidet på engelsk. For informasjon vennligst kontakt Nordic Trustee AS
Oslo, 5 December 2019
Nordic Trustee AS acts as bond trustee (the "Bond Trustee") for the Bondholders in the abovementioned bond issues DOFSUB07 (outstanding amount of NOK 508,000,000), DOFSUB08 (outstanding amount of USD 175,000,000) and DOFSUB09 (outstanding amount of NOK 900,000,000) (each a "Bond Issue", collectively the "Bond Issues" or the "Bonds"), all issued by DOF Subsea AS (the "Issuer" or the "Company").
All capitalised terms used herein shall have the meaning assigned to them in the bond agreement for DOFSUB07 dated 16 January 2013 (as amended on 19 December 2017, 6 September 2019 and 25 November 2019), the bond terms for DOFSUB08 dated 13 March 2017 (as amended on 6 September 2019) and the bond terms for DOFSUB09 dated 26 November 2018 (as amended on 6 September 2019), and made between the Bond Trustee and the Issuer (each, the "Bond Terms"), unless otherwise set out herein. References to Clauses and paragraphs are references to Clauses and paragraphs of the relevant Bond Terms.
The Issuer has requested that the Bond Trustee issues this request for a Bondholders' Meeting in each of the Bond Issues pursuant to Clause 16 (Bondholders' Meeting) for DOFSUB07 and Clause 15 (Bondholders' Decision) for DOFSUB08 and DOFSUB09, of the respective Bond Terms, to consider approval of the Proposal (as defined below).
The information in this summons regarding the Issuer and market conditions are provided by the Issuer, and the Bond Trustee expressly disclaims all liability whatsoever related to such information.
DOF Subsea is a leading provider of subsea services in all the major oil and gas production regions around the world. The Company has currently a fleet of 27 subsea vessels, 74 ROVs, and a firm backlog of NOK 13.7 billion as per 3Q 2019.
The Group operates in a capital intensive industry and is financed by approximately NOK 11.5 billion of secured debt from financial institutions and approximately NOK 2.6 billion of unsecured bond debt. The secured debt has a long-term repayment profile (typically 5-10% of original balance each year), under which the Company has repaid approximately NOK 1.2 billion every year. This has been made possible by a combination of contracted earnings and access to ordinary financing and refinancing.
As described by the Company earlier this year, including in the Interim Accounts for Q2 and Q3 2019, the market conditions within its industry remains challenging with oversupply of subsea vessels, resulting in continued pressure on vessel earnings and challenges with utilisation of both personnel and assets. These challenges persist, and current earnings are not sufficient to support the Company's current amortization plan, and there are imbalances in earnings and liquidity between entities within the Group. In addition, the market for financing and refinancing has become significantly more challenging triggered by a negative change in sentiment, and the Group has experienced that regular rollover (refinancing) of existing loan facilities is challenging. On a general basis, a number of banks have decided to reduce their exposure to, or exit, the offshore oil & gas industry by not providing new loans to companies in the industry.
The combined effect of the above is that capital markets are closed for any additional fundraising and that ordinary financing and refinancing in the bank market is expected to remain challenging. Earlier this year the Group succeeded in obtaining a short-term runway for some of the Group's loan facilities until the end of December 2019, but immediate measures are required to secure both a short term and a long term liquidity runway.
The Company and the Group proposes a solution to attain operational and financial stability for the Company both in the short and long term, involving all stakeholders. The majority of the Company's senior secured lenders and shareholders, as well as the largest bondholders in DOFSUB08 and DOFSUB09, have indicated their support to a refinancing solution.
In addition to this summons letter, the Company has prepared a separate presentation (the "Company Presentation") which is intended to give background information and an update on the Company's financial and operating status, as well as the proposed plan for amendments to the Company's capital structure and debt financing (the "Refinancing"). The Company Presentation is available under the Company's ticker on www.newsweb.no.
In view of the foregoing the Company has engaged Pareto Securities AS and ABG Sundal Collier ASA as its financial advisers (the "Financial Advisers") and Advokatfirmaet Thommessen AS as its legal advisers, and the Company has held discussions with various stakeholders, including without limitation, the Company's secured lenders, an informal ad hoc group of Bondholders holding more than one third of the Voting Bonds in DOFSUB07 (the "07 Ad Hoc Group"), another informal ad hoc group of Bondholders holding approximately 62% of the Voting Bonds in DOFSUB08, 47% of the Outstanding Bonds in DOFSUB09 and 9% of the Voting Bonds in DOFSUB07 (the "08/09 Ad Hoc Group").
In its capacity as bond trustee for DOFSUB07, the Bond Trustee has engaged Akin Gump LLP as its legal advisor and Carnegie AS as its financial advisor (together the "Bond Trustee's Advisors").
The 08/09 Ad Hoc Group has indicated their support for the Proposal subject to certain conditions as more particularly described in Section 1.3 (Key terms of the Refinancing in respect of the Bond Issues), Section 2 (The Proposal) and Section 3 (Conditions) below, while the 07 Ad Hoc Group has expressed that they do not currently support the Proposal.
Bondholders are encouraged to read all these documents and the Company's Interim Report for Q3 2019 to obtain an understanding of the situation of the Company and its business, the Refinancing and the Proposal.
The main objective of the Refinancing is to put in place a new financial structure with a debt repayment schedule and covenant structure that is aligned with the current market environment and establish a viable long-term platform to secure operational and financial stability for the Group until the market is expected to have recovered.
Subject to agreement to the Refinancing and the contemplated transactions and amendments to the existing financing agreements by the general meeting of the secured lenders and the Bondholders in each of the Bond Issues, the contribution from each of these stakeholders in the Refinancing may be summarised as follows:
The Group expects to reach agreement with the secured lenders to the DOF Subsea group (excluding lenders to any joint ventures) on the terms for a long-term financial plan involving, inter alia:
In addition, the Senior Secured Facilities Agreement will contain, inter alia, the following general undertakings:
Further details of the refinancing of the Senior Secured Facilities are set out in the Company Presentation.
As part of the Refinancing, the Company proposes to, inter alia, extend the Maturity Dates, adjust the coupon rates and align the applicable financial covenants and dividend restrictions with the amended terms for the secured bank loans, amending the respective Bond Terms as further described in Section 1.3 below and the Proposal.
A capital injection in the total amount of up to NOK 500,000,000 will be made in DOF ASA in a rights issue in which the existing shareholders of DOF ASA are granted subscription rights. DOF ASA's largest indirect shareholder, Laco AS, has committed to subscribe, directly, for NOK 200,000,000 in the rights issue.
An amount of NOK 200,000,000 will subsequently be made available to the Issuer through injections of new cash equity.
The Refinancing involves, and the Company proposes the following, amendments to the Bond Terms for DOFSUB07:
(i) Floating Rate adjustment:
The Floating Rate is currently 3 months NIBOR plus 7.00% p.a. margin.
The definition of "Margin" shall be amended to read:
" "Margin" means, from and including:
For the avoidance of doubt references to the Maturity Date in this definition shall mean the Maturity Date as extended in accordance with the Proposal.
Currently, the Scheduled Instalment of NOK 100,000,000 is payable on 20 December 2019 and the Maturity Date is 22 May 2020.
To provide for the repayment of the Bonds in full (including, for avoidance of doubt, the amount of the Scheduled Instalment) 9 calendar days after the maturity of the Senior Secured Facilities, the definition of "Maturity Date" shall be amended to read:
" "Maturity Date" means 29 December 2023. Any adjustments will be made according to the Business Day Convention."
Clause 10.1 (Maturity) of the Bond Terms shall be amended to read:
"The Bonds shall mature in full on the Maturity Date, and shall be repaid by the Issuer at a price equal to 115%."
1 To be set to the Effective Date.
Clause 10 (Maturity of the Bonds and Redemption) of the Bond Terms shall be amended to include a voluntary early redemption option of the Issuer, by inserting a new Clause 10.2 (based on the Bond Trustee's standard Bond Terms template) which shall read:
A new definition of "Call Option Repayment Date" shall be included in the Bond Terms, which shall read:
""Call Option Repayment Date" means the settlement date for the Call Option determined by the Issuer pursuant to Clause 10.2 (Voluntary early redemption - Call Option) or a date agreed upon between the Bond Trustee and the Issuer in connection with such redemption of Bonds. "
Clause 10.2 (Change of Control) in the existing Bond Terms will be renumbered as Clause 10.3.
Paragraph (c) (Financial Covenants) of Clause 13.4 (Special Covenants) is to be aligned with the applicable terms of the Senior Secured Facilities Agreement, and shall be amended to include a minimum liquidity covenant, a minimum value adjusted equity covenant and a requirement for positive working capital. In addition, to ensure continued alignment of the financial covenants between the Bond Terms and the Senior Secured Facilities Agreement a "most favoured nation clause" shall be included.
Paragraph (c) of Clause 13.16 (Financial Covenants) of shall be amended to read:
"(c) Financial Covenants
The definition of Cash and Cash Equivalent shall remain as per the amendment agreement to the Bond Terms dated 6 September 2019, and the definition of Value Adjusted Equity Ratio of the original Bond Agreement is not amended.
A new definition of "Working Capital" shall be included in the Bond Terms, which shall read:
" "Working Capital" means, at any time, the consolidated book value of the total current assets of the Group less the consolidated book value of the total current liabilities of the Group (excluding the current portion of long term debt), in each case in accordance with IFRS."
Clause 13.4 (a) (Dividends restrictions) is to be aligned with the applicable terms of the Senior Secured Facilities Agreement.
The new 13.4 (a) (Dividends restrictions) shall read:
"The Issuer shall not, during the term of the Bonds, make any Distributions, unless an IPO Event has occurred."
The definition of "Distributions" shall be included in the definitions chapter of the Bond Terms, and shall read:
" "Distributions" means, whether in cash or in kind and including without limitation by any total return swaps or instruments with similar effect (i) any dividend payment, repurchase of shares or any loans or other distributions or payments to the Issuer's direct or indirect and (ii) any service of Subordinated Loans."
(vii) Inclusion of Financial Indebtedness Restrictions:
Clause 13.3 (General Covenants) shall be amended to include a new subparagraph (i) which shall read:
"(i) Financial Indebtedness
The Issuer shall not, and shall procure that no other Group Company will, incur, create or permit to subsist any Financial Indebtedness, other than Permitted Financial Indebtedness."
A new definition of "Permitted Financial Indebtedness" shall be included in the Bond Terms, which shall read:
A new definition of "Financial Support" shall be included in the Bond Terms, which shall read:
" "Financial Support" means any loans, guarantees, Security or other financial assistance (whether actual or contingent)."
A new definition of "Senior Secured Facility" shall be included in the Bond Terms, which shall read:
" "Senior Secured Facility" means any senior secured facility provided by commercial banks, and/or export credit agencies incurred by the Issuer or any Group Company for the purpose of financing existing vessels or assets, and with cross collateral in all relevant vessels, the principal amount of which (when aggregated with the outstanding principal amount under any other such facility) shall not exceed USD 680,000,000."
Clause 13.3 (General Covenants) shall be amended to include a new subparagraph (i) which shall read:
A new definition of "Permitted Security" shall be included in the Bond Terms, which shall read:
The entering into effect of the amendments to the Bond Terms as set out above shall be subject to, inter alia, the finalisation and execution of amended and restated Bond Terms, including the amendment and restatement agreement relating thereto, documenting the amendments and the customary closing conditions for their effectiveness (together the "Amended DOFSUB07 Bond Terms").
For the avoidance of doubt the Amended DOFSUB07 Bond Terms will also include, as applicable, the amendments made to the original bond terms in the amendment no. 1 dated 19 December 2017 and the amendment agreement dated 6 September 2019, adjusted to reflect the amendments set out in this summons letter and the Proposal.
The Refinancing involves, and the Company proposes the following, amendments to the Bond Terms for DOFSUB08:
(i) Interest Rate adjustment:
The Interest Rate is currently 9.50 per cent. per annum.
The definition of "Interest Rate" shall be amended to read:
" "Interest Rate" means, from and including:
For the avoidance of doubt references to the Maturity Date in this definition shall mean the Maturity Date as extended in accordance with the Proposal.
Extension of the Maturity Date: (ii)
The Maturity Date is currently 14 March 2022.
The definition of "Maturity Date" shall be amended to read:
""Maturity Date" means 14 August 2024, adjusted according to the Business Day Convention."
(iii) Inclusion of a voluntary early redemption option (call option):
Clause 10 (Maturity of the Bonds and Redemption) of the Bond Terms shall be amended to include a voluntary early redemption option of the Issuer, by inserting a new Clause 10.2 (based on the Bond Trustee's standard Bond Terms template) which shall read:
2 To be set to the Effective Date.
3 To be set equal to USD Semi Annual 30/360 (vs 3 months LIBOR) 5 years interest swap plus 400 bps at the Effective Date (as defined below).
4 To be set equal to USD Semi Annual 30/360 (vs 3 months LIBOR) 5 years interest swap plus 800 bps at the Effective Date
A new definition of "Call Option Repayment Date" shall be included in the Bond Terms, which shall read:
""Call Option Repayment Date" means the settlement date for the Call Option determined by the Issuer pursuant to Clause 10.2 (Voluntary early redemption – Call Option) or a date agreed upon between the Bond Trustee and the Issuer in connection with such redemption of Bonds. "
Clause 10.2 (Change of Control) in the existing Bond Terms will be renumbered as Clause 10.3.
Clause 10.3 (Early redemption due to a tax event) in the existing Bond Terms will be renumbered as Clause 10.4.
(iv) Redemption price on the Maturity Date:
Clause 10.1 (Redemption of Bonds) of the Bond Terms shall be amended to read:
"The Outstanding Bonds will mature in full on the Maturity Date, and shall be redeemed by the Issuer on the Maturity Date at a price equal to 115 per cent. of the Nominal Amount."
Alignment of the Financial Covenants: (v)
Clause 13.16 (Financial Covenants) is to be aligned with the applicable terms of the Senior Secured Facilities Agreement, and shall be amended to include a minimum liquidity covenant, a minimum value adjusted equity covenant and a requirement for positive working capital. In addition, to ensure continued alignment of the financial covenants between the Bond Terms and the Senior Secured Facilities Agreement a "most favoured nation clause" shall be included.
Clause 13.16 (Financial Covenants) of shall be amended to read:
"(a) The Issuer shall ensure that the Group on a consolidated basis maintains:
The definition of Cash and Cash Equivalent shall remain as per the amendment agreement to the Bond Terms dated 6 September 2019.
A new definition of "Excess Value" shall be included in the Bond Terms, which shall read:
" "Excess Value" means the positive or negative difference between the Market Value of the Vessels and the book value of the Vessels."
A new definition of "Market Value" shall be included in the Bond Terms, which shall read:
" "Market Value" means the consolidated fair market value of the Vessels in NOK determined quarterly as the average of independent valuations of such Vessels (for vessels under construction, estimated market value of a delivered vessel adjusted for remaining capex) obtained from two independent and well reputed sale and purchase brokers familiar with the market for such vessels appointed by the Issuer and approved by the Bond Trustee. Such valuations shall be made on the basis of a sale for prompt delivery for cash at arm's length on normal commercial terms as between a willing buyer and seller, on an "as is where is" basis, free of any existing charter or other contract of employment. The cost of such determination shall be for the account of the Issuer."
A new definition of "Value Adjusted Equity" shall be included in the Bond Terms, which shall read:
" "Value Adjusted Equity" means the Book Equity adjusted to take into account any Excess Value."
A new definition of "Value Adjusted Equity Ratio" shall be included in the Bond Terms, which shall read:
" "Value Adjusted Equity Ratio" means Value Adjusted Equity to Value Adjusted Total Assets "
A new definition of "Value Adjusted Total Assets" shall be included in the Bond Terms, which shall read:
" "Value Adjusted Total Assets" means the consolidated book value of the Group's total assets in accordance with IFRS adjusted to take into account any Excess Value "
A new definition of "Vessels" shall be included in the Bond Terms, which shall read:
""Vessels" means all and any vessel owned by a Group Company including any vessels under construction."
A new definition of "Working Capital" shall be included in the Bond Terms, which shall read:
" "Working Capital" means, at any time, the consolidated book value of the total current assets of the Group less the consolidated book value of the total current liabilities of the Group (excluding the current portion of long term debt), in each case in accordance with IFRS."
Clause 13.11 (Distributions and servicing of Subordinated Loans) is to be aligned with the applicable terms of the Senior Secured Facilities Agreement.
The new 13.11 (Distributions) shall read:
"The Issuer shall not, during the term of the Bonds, make any Distributions, unless an IPO Event has occurred."
The definition of "Distributions" shall be included in the definitions chapter of the Bond Terms, and shall read:
" "Distributions" means, whether in cash or in kind and including without limitation by any total return swaps or instruments with similar effect (i) any dividend payment, repurchase of shares or any loans or other distributions or payments to the Issuer's direct or indirect and (ii) any service of Subordinated Loans."
The definition of "Permitted Financial Indebtedness" shall be amended to read:
" "Permitted Financial Indebtedness" means any Financial Indebtedness:
The definition of "Financial Support" shall be amended to read:
" "Financial Support" means any loans, guarantees, Security or other financial assistance (whether actual or contingent)."
A new definition of "Senior Secured Facility" shall be included in the Bond Terms, which shall read:
""Senior Secured Facility" means any senior secured facility provided by commercial banks, and/or export credit agencies incurred by the Issuer or any Group Company for the purpose of financing existing vessels or assets, and with cross collateral in all relevant vessels, the principal amount of which (when aggregated with the outstanding principal amount under any other such facility) shall not exceed USD 680,000,000. "
The definition of "Existing Bonds" shall be deleted.
The definition of "Permitted Security" shall be amended to read:
" "Permitted Security" means:
supplied to any Group Company in the ordinary course of trading and on the supplier's standard or usual terms and not arising as a result of any default or omission by any such Group Company; and
(e) any Security in an aggregate amount of up to NOK 100,000,000 not otherwise permitted above."
Clause 13.14 (Negative Pledge) of the Bond Terms shall be amended to read:
The entering into effect of the amendments to the Bond Terms as set out above shall be subject to, inter alia, the finalisation and execution of an amended and restated Bond Terms, including the amendment and restatement agreement relating thereto, documenting the amendments and the customary closing conditions for their effectiveness (together the "Amended DOFSUB08 Bond Terms").
For the avoidance of doubt the Amended DOFSUB08 Bond Terms will also include, as applicable, the amendments made to the original bond terms in the amendment agreement dated 6 September 2019, adjusted to reflect the amendments set out in this summons letter and the Proposal.
The Refinancing involves, and the Company proposes the following, amendments to the Bond Terms for DOFSUB09:
The Interest Rate is currently 3 months NIBOR plus 8.00% p.a. margin.
The definition of "Margin" shall be amended to read:
" "Margin" means, from and including:
For the avoidance of doubt references to the Maturity Date in this definition shall mean the Maturity Date as extended in accordance with the Proposal.
5 To be set to the Effective Date.
(ii) Extension of the Maturity Date:
The Maturity Date is currently 27 November 2023.
The definition of "Maturity Date" shall be amended to read::
" "Maturity Date" means 27 December 2024, adjusted according to the Business Day Convention."
Clause 10 (Maturity of the Bonds and Redemption) of the Bond Terms shall be amended to include a voluntary early redemption option of the Issuer, by inserting a new Clause 10.2 (based on the Bond Trustee's standard Bond Terms template) which shall read:
A new definition of "Call Option Repayment Date" shall be included in the Bond Terms, which shall read:
""Call Option Repayment Date" means the settlement date for the Call Option determined by the Issuer pursuant to Clause 10.2 (Voluntary early redemption – Call Option) or a date agreed upon between the Bond Trustee and the Issuer in connection with such redemption of Bonds."
Clause 10.2 (Change of Control) in the existing Bond Terms will be renumbered as Clause 10.3.
Clause 10.3 (Early redemption due to a tax event) in the existing Bond Terms will be renumbered as Clause 10.4.
(iv) Redemption price on the Maturity Date:
Clause 10.1 (Redemption of Bonds) of the Bond Terms shall be amended to read:
"The Outstanding Bonds will mature in full on the Maturity Date, and shall be redeemed by the Issuer on the Maturity Date at a price equal to 115 per cent. of the Nominal Amount."
Clause 13.16 (Financial Covenants) is to be aligned with the applicable terms of the Senior Secured Facilities Agreement, and shall be amended to include a minimum liquidity covenant, a minimum value adjusted equity covenant and a requirement for positive working capital. In addition, to ensure continued alignment of the financial covenants between the Bond Terms and the Senior Secured Facilities Agreement a "most favoured nation clause" shall be included.
Clause 13.16 (Financial Covenants) of shall be amended to read:
The definition of Cash and Cash Equivalent shall remain as per the amendment agreement to the Bond Terms dated 6 September 2019.
A new definition of "Excess Value" shall be included in the Bond Terms, which shall read:
" "Excess Value" means the positive or negative difference between the Market Value of the Vessels and the book value of the Vessels. "
A new definition of "Market Value" shall be included in the Bond Terms, which shall read:
""Market Value" means the consolidated fair market value of the Vessels in NOK determined quarterly as the average of independent valuations of such Vessels (for vessels under construction, estimated market value of a delivered vessel adjusted for remaining capex) obtained from two independent and well reputed sale and purchase brokers familiar with the market for such vessels appointed by the Issuer and approved by the Bond Trustee. Such valuations shall be made on the basis of a sale for prompt delivery for cash at arm's length on normal commercial terms as between a willing buyer and seller, on an "as is where is" basis, free of any existing charter or other contract of employment. The cost of such determination shall be for the account of the Issuer."
A new definition of "Value Adjusted Equity" shall be included in the Bond Terms, which shall read:
" "Value Adjusted Equity" means the Book Equity adjusted to take into account any Excess Value."
A new definition of "Value Adjusted Equity Ratio" shall be included in the Bond Terms, which shall read:
" "Value Adjusted Equity Ratio" means Value Adjusted Equity to Value Adjusted Total Assets."
A new definition of "Value Adjusted Total Assets" shall be included in the Bond Terms, which shall read:
" "Value Adjusted Total Assets" means the consolidated book value of the Group's total assets in accordance with IFRS adjusted to take into account any Excess Value "
A new definition of "Vessels" shall be included in the Bond Terms, which shall read:
" "Vessels" means all and any vessel owned by a Group Company including any vessels under construction."
A new definition of "Working Capital" shall be included in the Bond Terms, which shall read:
" "Working Capital" means, at any time, the consolidated book value of the total current assets of the Group less the consolidated book value of the total current liabilities of the Group (excluding the current portion of long term debt), in each case in accordance with IFRS."
Clause 13.7 (Dividends and distributions) is to be aligned with the applicable terms of the Senior Secured Facilities Agreement.
The new 13.7 (Dividends and distributions) shall read:
"The Issuer shall not, during the term of the Bonds, make any Distributions, unless an IPO Event has occurred."
The definition of "Distributions" shall be included in the definitions chapter of the Bond Terms, and shall read:
""Distributions" means, whether in cash or in kind and including without limitation by any total return swaps or instruments with similar effect (i) any dividend payment, repurchase of shares or any loans or other distributions or payments to the Issuer's direct or indirect and (ii) any service of Subordinated Loans."
The definition of "Permitted Financial Indebtedness" shall be amended to read:
""Permitted Financial Indebtedness" means any Financial Indebtedness:
The definition of "Financial Support" shall be amended to read:
" "Financial Support" means any loans, guarantees, Security or other financial assistance (whether actual or contingent). "
A new definition of "Senior Secured Facility" shall be included in the Bond Terms, which shall read:
" "Senior Secured Facility" means any senior secured facility provided by commercial banks, and/or export credit agencies incurred by the Issuer or any Group Company for
the purpose of financing existing vessels or assets, and with cross collateral in all relevant vessels, the principal amount of which (when aggregated with the outstanding principal amount under any other such facility) shall not exceed USD 680,000,000."
The definition of "Permitted Security" shall be amended to read:
" "Permitted Security" means:
Clause 13.10 (Negative Pledge) of the Bond Terms shall be amended to read:
The entering into effect of the amendments to the Bond Terms as set out above shall be subject to, inter alia, the finalisation and execution of an amended and restated Bond Terms, including the amendment and restatement agreement relating thereto, documenting the amendments and the customary closing conditions for their effectiveness (together the "Amended DOFSUB09 Bond Terms").
For the avoidance of doubt the Amended DOFSUB09 Bond Terms will also include, the amendments made to the original bond terms in the amendment agreement dated 6 September 2019, adjusted to reflect the amendments set out in this summons letter and the Proposal.
To enable the Issuer to implement the proposed Refinancing, the Issuer has requested the Bond Trustee to summon a Bondholders' meeting for each of the Bond Issues to consider the amendments to the respective Bond Terms contemplated by the Refinancing.
The Issuer proposes that the Bondholders of each of the Bond Issues resolve the following (the "Proposal"):
The implementation of the Proposal shall be subject to the following conditions precedent being satisfied (or waived), as determined by the Bond Trustee, no later than on 28 February 2020 (the "Longstop Date"):
provided, however, that effective immediately upon the approval of the Proposal by a 2/3 majority of Voting Bonds present at the Bondholders' Meeting for DOFSUB 07 the payment date for the Scheduled Instalment under DOFSUB07 shall be deferred to the Longstop Date.
The date the Bond Trustee confirms to the Issuer that the above conditions precedent have been satisfied (or waived), and the Proposal become effective, shall be referred to as the (the "Effective Date").
If the Effective Date has not occurred by the Longstop Date the approvals and authorisations granted by each of the Bondholders' Meetings will lapse.
Other than the waivers and amendments contemplated by the terms and conditions of each of the Bond Terms will remain unchanged and continue to apply in their existing form.
The Issuer believes that the new capital structure resulting from the Refinancing would be sustainable in the current market environment and secure operational and financial stability for the Group until the market is expected to have recovered, for the benefit of all stakeholders. In the Company's opinion, the Proposal represents the best alternative for the Bondholders and its other stakeholders, given the current circumstances.
The request is put forward to the Bondholders without further evaluation or recommendations from the Bond Trustee. Nothing herein shall constitute a recommendation to the Bondholders from the Bond Trustee. The Bondholders must independently evaluate whether the Proposal is acceptable and vote accordingly.
The Issuer has informed the Bond Trustee that the Issuer has received indication of support for the Proposal from Bondholders holding approximately 9% of the Voting Bonds in DOFSUB07, 62% of the Voting Bonds in DOFSUB08 and 47% of the Voting Bonds in DOFSUB09.
For further information about the Issuer, please visit the Issuer's website www.dofsubsea.com.
Bondholders are also invited to contact either of the Financial Advisers for further information:
Ola Nygård Telephone: +47 22 01 61 86 +47 41 21 34 10 [email protected]
Jan Erik Klepsland Telephone: +47 22 01 60 82 +47 99 64 80 34 [email protected]
Magnus Drageset Telephone: +47 22 01 61 41 +47 41 21 34 10 [email protected]
Rolf Kristiansen +47 22 87 87 46/+47 908 56 712 [email protected]
Christian Ramm + 47 24 13 21 33/+47 917 85 107 [email protected]
Each of the Financial Advisers acts solely for the Issuer and no-one else in connection herewith. No due diligence investigations have been carried out by the Financial Advisers with respect to the Issuer, and each of the Financial Advisers expressly disclaims any and all liability whatsoever in connection with the Proposal (including but not limited to the information contained herein).
Bondholders are hereby summoned to Bondholders' Meetings in each of the Bond Issues:
"The Proposal (as defined in section 2 of this summons to the Bondholders" Meetings in each Bond Issue) is approved by the Bondholders' Meeting. The Proposal is only adopted provided that the Bondholders' Meetings for all three Bond Issues approve the Proposal.
The Bond Trustee is authorised to enter into the necessary agreements in connection with decisions made by the Bondholders' Meeting in the relevant Bond Issue as well as carry out necessary completion work, including making necessary amendments to the Bond Terms in each Bond Issue. "
To approve the above resolution in each Bond Issue, Bondholders representing at least 2/3 of the Voting Bonds in each Bond Issue represented in person or by proxy at the relevant Bondholders' Meeting must vote in favour of the resolution. In order to form a quorum, at least 5/10 of the Voting Bonds in each Bond Issue must be represented at the relevant Bondholders' Meeting.
Please find attached a Bondholder's Form from the Securities Depository (VPS), indicating your bondholding at the printing date. The Bondholder's Form will serve as proof of ownership of the Bonds and of the voting rights at the bondholders' meeting. (If the bonds are held in custody - i.e. the owner is not registered directly in the VPS - the custodian must confirm; (i) the owner of the bonds, (ii) the aggregate nominal amount of the bonds and (ii) the account number in VPS on which the bonds are registered.)
The individual bondholder may authorise Nordic Trustee AS to vote on its behalf, in which case the Bondholder's Form also serves as a proxy. A duly signed Bondholder's Form, authorising Nordic Trustee AS to vote, must then be returned to the Bond Trustee in due time before the meeting is scheduled (by scanned e-mail, telefax or post - please see the first page of this letter for further details),
At the Bondholders' Meeting votes may be cast based on Bonds in the relevant Bond Issue held at close of business on the day prior to the date of the Bondholders' Meeting. In the event that Bonds have been transferred to a new owner after the Bondholder's Form was made, the new Bondholder must bring to the Bondholders' Meeting or enclose with the proxy, as the case may be, evidence which the Bond Trustee accepts as sufficient proof of the ownership of the Bonds.
For practical purposes, we request those who intend the Bondholders' Meeting, either in person or by proxy other than to Nordic Trustee AS, to notify the Bond Trustee by telephone or by e-mail ([email protected]) within 16:00 hours (4 pm) (Oslo time) the Business Day before the relevant meeting takes place.
Yours sincerely Nordic Trustee AS
Enclosed:
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.