OSA Goliath bondholders waive condition to release of escrowed funds

By Angela McDaniels

Tacoma, Wash., April 28 – OSA Goliath Pte., Ltd. received consents from the holders of its $160 million of 12% senior secured bonds due 2018 and $16.24 million of 15% senior secured bonds due 2015 to waive a requirement for the release of funds currently in escrow, according to a notice from bond trustee Nordic Trustee ASA.

The bondholders waived the requirement that a second naval mortgage amendment be executed before the proceeds of a recent tap issue be disbursed to the company.

Bondholders voted at meetings on April 28. For each issue, there were enough bondholders present to form a quorum, and the proposed resolution obtained 100% of the votes cast.

The company issued an add-on to the 15% bonds, and the proceeds were distributed to an escrow account on April 8. Security over the OSA Goliath vessel is needed in order to disburse the proceeds to the company.

However, when a filing was made to amend the mortgage for the vessel registered in Panama to accommodate the new tap issue, the trustee said it was discovered that the Panama Public Registry of Vessels had received a pending request related to the vessel, whereby no other registrations can be achieved during the request period.

A filing has been made to allow the amendment of mortgage to be reflected on the records of the vessel as pending to be registered. Nordic Trustee said it is unlikely that enough clarity will be received or the process will be finalized before the use of the funds from the new tap issue will be needed to ensure bondholders’ interest.

According to the notice, OSA Goliath’s Panama counsel does not think existing Panama mortgages over the vessel are affected by the pending request.

The amounts currently covered by the existing mortgages are equal to the $272.67 million outstanding on the bonds as of April 14, which excludes the new tap issue.

In accordance with the proposed plan to have the vessel transferred to a Singapore special-purpose vehicle through a judicial sale under the jurisdiction of the Bahamas Admiralty Marshal, the proposed sale price will exceed $242 million, according to the notice.

Since the total amount covered by the mortgages is roughly $30 million more than the sale price of the vessel, the trustee said third parties’ ability to make claims against the sale price is limited.

Under an intercreditor agreement, the 15% bonds must be repaid in full before any payment can be made on the 12% bonds. As a result, the trustee said 15% bondholders, including the holders of the new tap issue, would, if the vessel is sold, receive equal consideration as if the naval mortgage had been amended.

OSA Goliath is a subsidiary of Mexico City-based offshore oil engineering services company Oceanografia SA de CV.

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