Atlantic Offshore secures votes for waiver of covenant, amendment

By Tali Rackner

Norfolk, Va., Oct. 6 – Atlantic Offshore AS said the proposed waiver and amendment to its NOK 500 million of floating-rate senior bonds due 2018 obtained 99.78% of the votes at its bondholder meeting on Tuesday, according to a notice from bond trustee Nordic Trustee ASA.

The proposal was adopted according to the voting requirements of the bond agreement.

As previously reported, the company asked holders for a temporary waiver of the market-adjusted equity ratio financial ratio covenant.

The covenant calls for a minimum ratio of 30% if the company’s contractual coverage for its fleet is 60% or lower, 25% if its coverage is higher than 60% but less than or equal to 70% and 20% if its coverage is higher than 70%. Contractual coverage is defined as the total number of vessel-months on charter parties exceeding 30 days divided by the total number of vessel-months capacity.

On the last measurement date in June, the ratio was 15.5%.

Because the request was approved, the covenant will not be measured again until Feb. 28 at the latest.

The company offered a one-time amendment fee of 50 basis points to bondholders who approve the proposal.

The company said the book value of its debt increased with the recent weakening of the Norwegian kroner, which in turn affected its ability to comply with the financial covenants. In addition, the global downturn in the energy space combined with the weak outlook of the oil services industry have led to market values for the company’s assets being impaired.

The company’s controlling shareholder, Ogreid Eiendom AS, committed to converting roughly NOK 53 million of shareholder loans into equity by Oct. 31 and investing up to NOK 25 million of equity. This commitment was subject to the waiver being granted.

Pareto Securities AS (47 22 87 87 70) is acting as the company’s financial adviser.

Atlantic Offshore is based in Kystbasen Agotnes, Norway. It owns and operates multirole rescue vessels and platform supply vessels.

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