Electromagnetic Geoservices talks $32.5 million convertibles due 2023 at Libor plus 550 bps, up 35%

By Abigail W. Adams

Portland, Me., March 2 – Electromagnetic Geoservices ASA has called for an extraordinary meeting on March 23 for approval to issue $32.5 million in convertible bonds due 2023.

The five-year convertible bonds have proposed terms of an interest rate based on Libor plus 550 basis points and an initial conversion premium of 35%. The convertible bonds are part of a comprehensive refinancing proposal for the company, according to a company news release.

The convertible bonds will be used to refinance Electromagnetic Geoservices’ current bond issue, which matures in 2019. The free cash covenant in the new bond issue will be reduced to $2.5 million from the $10 million covenant in the current loan.

The convertible bond is being proposed alongside a rights issue with gross proceeds of $12.5 million – $10 million of which will be underwritten. There is a maximum of 70,833,833 new shares under the rights issue.

Net proceeds from the rights issue will be used for general corporate purposes.

The underwriting agreements are expected to be executed on Monday.

The rights issue and convertible bond issue are subject to approval at the extraordinary general meeting on March 23.

Electromagnetic Geoservices is a Trondheim, Norway-based marine electromagnetic company that uses proprietary electromagnetic technology to support oil and gas companies in their offshore search for hydrocarbons.

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