Interoil Exploration secures votes to delay tax refund call of bonds

By Susanna Moon

Chicago, April 27 - Interoil Exploration and Production ASA holders approved postponing the repayment of a tax refund under its 15% senior callable bonds due 2014.

The repayment of the tax refund will be held off for a year until the interest payment date in March 2013, according to a company press release.

The proposed resolution obtained 84.86% of the votes at a meeting held April 27, and the proposal was adopted. The meeting was announced April 13.

As previously noted, the company received a tax refund of about NOK 45 million from a judgment in a tax dispute with Eksportconsult AS and Force Capital Partners AS, which was assigned as security for the bonds and is to be used to call the bonds at a premium of 110% of par.

Interoil said that it would like to retain the funds to improve its working capital and that it had been in discussions with a group of its largest bondholders to put off repayment of the tax refund.

In return, the company agreed to a tighter covenant structure, including no dividends for the duration of the bond, as well as an adjustment of a restriction on oil price hedging that will now allow for new hedging, according to a previous press release.

Bondholders were offered NOK 4.5 million in consent fees, and the tax refund will be repaid at a 5% premium to par when it is due in March 2013.

Pareto Securities and RS Platou Markets are the financial advisers.

Interoil is an Oslo-based exploration and production company.

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