Floatel proposes converting 9% bonds into new bonds in two parts, stock

By Wendy Van Sickle

Columbus, Ohio, March 16 – Floatel International Ltd. is making some proposals regarding its $400 million of 9% first-lien senior secured bonds (ISIN: NO0010833775), according to a notice from the bonds’ trustee Nordic Trustee AS.

In order to implement a restructuring, the issuer is proposing to convert the first-lien bonds – including overdue interest from April and October of 2020, but excluding accrued interest after October 2020, which will be canceled – into $230 million of new bonds and 42,947,890 common shares, which will represent 40.08% of the total issued share capital of Floatel.

The new bonds will be subject to an immediate $30 million prepayment and will be split evenly into $115 million tranches that will be paid in cash and in kind, respectively. The immediate prepayment will be spread evenly over both tranches.

Each tranche of new bonds will have a 5.5-year term.

Annual interest will be 6% for the new cash bonds and 10% for the PIK bonds.

The new bonds will be secured against five Floatel vessels and related assets and will be redeemable after one year.

Holders will have a put right at 101 following a change of control.

Floatel is asking bondholders to approve its proposal by way of a written resolution.

Voting will close at 7 a.m. ET on Friday.

In order for the proposal to pass, bondholders representing at least a two-thirds majority of the voting bonds must vote in favor of the proposal; or a quorum representing at least half of the voting bonds must submit a timely response and the votes cast in favor of the proposal must represent at least two-thirds of the voting bonds that gave timely response.

Floatel is a Hamilton, Bermuda-based provider of human habitats designed for hostile environments.

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