OSX 3 trustee seeks guidance on charter default, Dec. 22 bond payment

By Caroline Salls

Pittsburgh, Dec. 16 – OSX 3 Leasing BV senior secured callable bond trustee Nordic Trustee ASA is asking bondholders for approval to initiate bankruptcy proceedings against the company’s charterer and charter guarantor or seek enforcement actions if the charterer does not cure a payment default by the Dec. 23 deadline, according to a notice to bondholders.

The trustee said the charterer failed to make an Oct. 31 invoice payment due Dec. 1. As a result, it is in default under the charter contract.

Nordic Trustee is also seeking guidance from the bondholders on how to use $7.5 million held in a retention account, including whether those funds should be applied toward a $16.78 million interest payment due Dec. 22.

According to the notice, the trustee is suggesting that none of the retention account funds be applied toward the interest payment because it is not clear whether the charterer will continue to make payments under its contract, meaning bankruptcy proceedings or enforcement actions may be necessary.

In addition, the trustee said OSX 3 may be unable to fund working capital costs that are critical to the bondholders’ interests because it does not have any funds available to it.

Specifically, Nordic Trustee said the company failed to pay independent director invoices, leaving the payments to be made by the trustee out of available funds.

As a result, the trustee said it is also asking bondholders to authorize it to pay amounts deemed necessary to protect the interests of the bondholders. The trustee is proposing that €3.2 million in segregated funds related to the implementation of the company’s restructuring be applied toward the critical payments.

A bondholder meeting is scheduled for Dec. 23.

OSX 3 Leasing is a subsidiary of OSX Brasil SA, a Rio de Janeiro-based oil and gas holding company.

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