OAS reports debt talks go on, no deal yet; creditors present new plan

New York, July 9 – OAS SA said that discussions are continuing with holders of OAS Investments GmbH’s 8.25% senior notes due 2019, OAS Finance Ltd.’s 8% senior notes due 2021 And OAS Finance Ltd.’s 8.875% perpetual notes but no deal has been reached yet.

Representatives of the noteholders presented a new term sheet for a restructuring on July 3, the company said, and on July 7 OAS and noteholders held a conference call to discuss the proposal but so far the company has not responded to the second creditors’ plan nor has it made a counterproposal.

OAS made the announcement after confidentiality agreements executed with the noteholders on June 25 expired.

Under the second noteholder proposal, the drop-down of Invepar to Infaestrutura to OAS Investimentos SA will be treated as if it never happened.

Creditors of OAS Investimentos will receive a cash payment from Investimentos asset sales, first lien OAS notes, OAS take-back notes and creditor trust certificates. These creditors’ share of the first lien OAS notes will include an additional R$70 million to reflect the subrogation claim arising on repayment of the fourth series debentures and settlement of various other intercompany claims.

Creditors of OAS and Construtora OAS SA will receive OAS take-back notes, the right to participate in the postpetition financing in exchange for first lien OAS notes, OAS warrants, the right to the creditors’ share of excess cash flow after the first lien OAS notes have been paid in full and creditor trust certificates.

OAS and Construtora OAS will raise R$550 million of postpetition financing repayment of a R$100 million shareholder loan and up to R$450 million of new postpetition financing.

All OAS and Construtora OAS creditors will be offered the opportunity to participate in the R$450 million postpetition financing but it will be backstopped by OAS Investimentos creditors via a R$300 million advance under the DIP/exit financing and up to R$150 million advanced from 75% of the net proceeds of the Investimentos assets slated for sale other than Invepar.

The first lien notes will be denominated in dollars and will have a face amount of up to R$700 million, or $223 million. The interest rate will be 16%, of which 15.5% will be paid in kind in the first five years. They will mature in seven years and have a cash sweep.

The tranche A take-back paper will be denominated in reals and have a face amount of R$3,327,000,000. It will pay interest at a rate of 0.5%, of which 0.25% will be paid in kind for the first five years. The debt will mature in 25 years.

The tranche B take-back paper will be denominated in dollars and will have a face amount of R$725 million or $231 million. It will pay interest at 4% of which 3.75% will be paid in kind for the first five years and will mature after 19 years, with amortization beginning in the eighth year.

On June 22, OAS presented a plan of reorganization to the First Specialized Bankruptcy Court of Sao Paulo, Brazil.

OAS is a Sao Paulo-based construction company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.