norske oljeselskap asks bondholders to eliminate dividend restrictions

By Wendy Van Sickle

Columbus, Ohio, Sept. 30 – Det norske oljeselskap ASA is seeking to amend the bond agreement for its floating-rate senior bonds due 2020 in order to align the agreement with its reserve-based lending facility, according to a notice from Nordic Trustee ASA.

A bondholder meeting for voting on the proposed amendments has been called for 7 a.m. ET on Oct. 13 in Oslo.

The company is proposing to replace restrictions related to dividend disbursements with a put option.

As compensation for the amendment, norske oljeselskap is offering to increase the payment at maturity to 107% of par from 104% of par.

The company said holders of more than half of the bonds have confirmed their support of the plan.

“The issuer believes that by approving the proposed amendments creditors continue to be well protected towards downside scenarios with regards to the oil price and will benefit from management being able to concentrate fully on the execution of the ongoing project developments,” according to the summons to the bondholder meeting.

In June, the company announced an agreement with BP plc to merge with BP Norge AS through a share purchase transaction. The company said it obtained lender consent to amend some covenants of its reserve-based lending facility in order to ensure its “ability to continuously improve and develop its business profile, while at the same time ensuring alignment of all stakeholders’ interest.”

The proposed bond amendments would bring the bond agreement in line with those changes, the company said.

To establish a quorum, at least half the voting bonds must be represented at the bondholder meeting. In order to pass, bondholders representing at least half the bonds represented at the meeting must vote in favor of the resolution containing the amendments.

Based in Trondheim, Norway, the issuer is an oil exploration and development company.

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