ShaMaran aims to put off payment for 12% notes, may seek consents

By Susanna Moon

Chicago, Nov. 19 – EM-focused ShaMaran Petroleum Corp. is looking for holders to temporarily waive a longstop event under its $240 million 12% senior notes due 2023 related to the termination of a planned acquisition.

ShaMaran's wholly owned General Exploration Partners, Inc. subsidiary had agreed to acquire from Marathon Oil KDV BV another 15% working interest in the Atrush Block Production Sharing Contract in the Kurdistan Region of Iraq, according to an announcement on Nov. 18.

Because the company was unable to secure the approval needed, it is looking to make another bid for the purchase.

In the meantime, the company is required to repay $50 million plus accrued interest to noteholders because of the end of its Marathon acquisition and is looking to postpone repayment while it attempts to gain the assets via other means.

“While the company considers its options, it is proposing to seek a waiver from bondholders to keep the $50 million restricted cash on the Marathon pledge account,” according to a company announcement.

Under the bond terms, the expiration of the Marathon acquisition creates a Marathon transaction longstop event that requires the $50 million repayment to bondholders.

If the proposal is backed by a majority of holders, the company said it will propose the temporary waiver by way of written resolution.

Pareto Securities AS is the agent.

More details

The underlying agreements for the development and operation of the Atrush block require that the Minister of Natural Resources of the Kurdistan Governmental Authority and TAQA Atrush BV, the other owner of a participating interest in the Atrush block, consent to the assignment of the participating interest from Marathon Oil KDV to General Exploration.

The minister has agreed to provide the consent; however, TAQA has refused, the release said.

“As a result of TAQA's unreasonable refusal to provide consent, Marathon reissued an offer to acquire MOKDV, a corporate transaction which does not require TAQA consent, with the result being that the company is now engaged in a new bidding process for the Marathon interest in the Atrush block,” according to the release.

The company said that it could not assure that the offer would result in the acquisition of the increased interest in the Atrush block.

“In the meantime, the company is reviewing all available options,” the company said.

As reported, the notes were announced June 19 and issued July 5.

Vancouver, B.C.-based ShaMaran is a Kurdistan focused production, development and exploration company.

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