Remedial announces bondholders' meeting for $210 million floaters

By Jennifer Chiou

New York, Feb. 3 - Remedial (Cyprus) PCL announced a Feb. 12 meeting for holders to vote on a restructuring proposal for its $210 million of floating-rate senior secured callable bonds due 2012.

Norsk Tillitsmann ASA is the loan trustee.

Remedial announced on July 27, 2009 that it planned to initiate a restructuring of its financial position or to seek additional capital by the end of 2009.

One key term of the proposal is a debt-for-equity swap in which all except $56.5 million of the bonds is exchanged on a pro rata basis for new shares representing 95% of Remedial's post-restructuring share capital.

At the end of November, the company said that it had a cash position of $300,000 and $56.5 million of blocked funds in escrow for the bonds.

According to a company release, the funds were blocked because there was a continuing event of default on the loan agreement after a missed Sept. 28 interest payment.

At the time, the company planned to ask the trustee to summon a meeting to ask for amendments to the loan agreement. At Norsk's request, the company delayed the meeting and took on AMA Capital Partners LLC and Bingham McCutchen (London) LLP as advisers on the bonds.

The advisers have been in contact with an ad hoc committee of holders of roughly 60% of the notes.

The company is requesting that holders defer interest payable on the bonds and release the escrowed funds to Remedial for working capital.

In consultations with the ad hoc committee, the advisers indicated that bondholders may allow a release of most of the escrowed funds provided that there is a shareholder contribution so that bondholders could retain at least $7 million of the funds to ensure that they could perfect a first-priority mortgage over a vessel being built for the company.

The company added that shareholders authorized in December the issue of the new share capital for the exchange.

They also authorized a rights issue of shares for a gross subscription price of $20 million at a pre-money equity valuation of $161.3 million. The company is not required to carry out the rights issue.

Based in Limassol, Cyprus, Remedial builds elevating support vessel well intervention and construction support units.

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