InterOil Exploration gets consents to amend some parts of 15% bonds

By Susanna Moon

Chicago, Nov. 17 – InterOil Exploration & Production ASA obtained the needed consents to amend some parts of its 15% senior callable bonds due 2014.

The proposals were presented at a meeting held Monday in Oslo, and there were enough holders to form a quorum, according to a notice from trustee Nordic Trustee ASA.

The proposed measure under clause 2.2 of the summons obtained 21.51% of the votes, whereas the proposed measure under clause 2.3 of the summons obtained 91.25% of the votes, the notice said.

As a result, the proposal under clause 2.3 was approved and will be adopted under the notes, while the other proposal failed to garner the needed support.

The company said on Nov. 3 that it began a consent solicitation for the notes after signing an agreement to sell subsidiary Interoil Exploration and Production Latin America AS to United Oilfield Colombia Inc. for $1 and the assumption of intercompany debt. The sale is subject to bondholder approval.

The Latin America subsidiary is the holding company for InterOil’s shares in Interoil Peru SA and North Oil Services SAC. It does not hold any other assets and has $44 million of intercompany debt to Interoil Peru.

The company said that Interoil Peru will not have any operations after its license agreements expire on April 5 and that North Oil Services is under liquidation and does not have any activities.

In addition, InterOil has begun a refinancing process to strengthen its financial position and is seeking some changes to the bond agreement that it said will help facilitate the refinancing.

The company asked noteholders to approve the sale of the Latin America subsidiary, the release of the pledge in the Latin America subsidiary, including the pledge over its inventory, operating assets, receivables and bank accounts, and the following amendments:

• Change the definition of “subsidiaries” by deleting Interoil Exploration and Production Latin America and North Oil Services;

• Change the definition of “guarantees” by deleting reference to North Oil Services;

• Change the definition of “preferred senior debt borrowers” by deleting reference to Interoil Peru;

• Change the definition of “share charge” by deleting reference to North Oil Services;

• Change the definition of “hydrocarbon resources” by deleting reference to block III and IV and Puli-B and Armero; and

• Change the notice period for summons to bondholders meetings.

According to the company, the reference to concessions Puli-B and Armero are no longer relevant because it no longer holds these concessions.

The holders of at least half of the bonds needed to be represented at the meeting in order to form a quorum. The holders of at least half of the bonds represented at the meeting needed to vote in favor of the proposal in order for it to pass.

InterOil is an Oslo-based exploration and production company.

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