Global Rig gets waiver from 13% bondholders to incur new loan

By Jennifer Chiou

New York, April 28 - Global Rig Co. ASA obtained a waiver from the holders of its 13% senior secured callable bonds due 2015, according to a notice from bond trustee Norsk Tillitsmann.

There were sufficient holders to form a quorum at the April 28 meeting, and all votes went in favor of the waiver.

As reported, the company has been working toward issuing $120 million of new bonds, the proceeds of which would be used to refinance the 13% bonds and take delivery of three new oil and gas drilling rigs from National Oilwell Varco, LP.

However, the company said a fire on one of its rigs has delayed the refinancing, so it now plans to borrow a $13 million short-term loan from Franklin Enterprises - which has agreed to underwrite the new bonds - and use the loan to make an installment payment on the new rigs.

As noted, the $12.71 million payment is due by May 1.

As security for the short-term loan, the company will assign its rights under the purchase agreement with National Oilwell Varco to Franklin Enterprises.

The company previously said the payment of the installment and the entry into the loan agreement with Franklin Enterprises would be prohibited by several covenants in the bond loan agreement. The waiver would allow these transactions to move forward.

The covenants in question allow the company to make investments only if at least 40% is financed by new equity, restrict the amount of permitted debt, prevent the granting of new security and restrict the purposes for which cash flow generated from operations of the company's current rigs can be used.

As previously reported, the company received a waiver from the bondholders in January that allowed it to enter into the purchase agreement with National Oilwell Varco.

Global Rig is an onshore rig owner and lessor based in Oslo.

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