Otium seeks waiver from holders of NOK 100 million unsecured bond

By Jennifer Chiou

New York, July 23 – Otium AS will hold an Aug. 6 meeting in Oslo for holders of its NOK 100 million unsecured bond due 2015, according to a notice from Nordic Trustee ASA.

The company is seeking a waiver for covenant breaches and any event of default after it discovered that a negative correction will be needed following the finalization of its annual accounts for 2013.

Specifically, Otium will breach the NOK 500 million required minimum level under the book equity covenant in its bond agreement.

In addition, the company is at risk of breaching, among other requirements, the minimum available liquidity covenant.

Otium also said that its market adjusted equity is about NOK 800 million, below the required NOK 1,000 million set out in the bond agreement.

The company is asking holders to forgo any early repayment claims during the waiver period.

In exchange, Otium is asking that holders amend the bond agreement to complete the following:

• The redemption price of the bonds will be increased to 101 from par;

• The marked-adjusted equity requirement will be changed to a minimum of NOK 750 million from NOK 1 billion;

• The company’s liquidity requirement will be lowered to a minimum of NOK 25 million from NOK 50 million; and

• The book equity requirement will be changed to a minimum of NOK 80 million from NOK 500 million.

In addition to the increased redemption price, Otium said it is proposing an amendment fee of 0.5% of the nominal amount of outstanding bonds to be paid to holders who deliver consents.

Holders of more than two-thirds of the bonds must vote in favor of the extraordinary resolution in order for it to pass. Holders of at least half of the bonds must be represented to form a quorum.

The company said that bondholders representing more than 66% of the outstanding bonds have expressed their support for the proposal.

Otium is a property developer in the residential, commercial and leisure market. The company was incorporated in 1987 and is based in Stavanger, Norway.

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