Songa Offshore plans $150 million convertibles to yield 4%-6%, up 25%

By Rebecca Melvin

New York, Nov. 25 - Songa Offshore SE said it is planning to issue about $150 million of convertible bonds in a private placement as part of a comprehensive refinancing aimed at raising up to $425 million in new capital, according to a news release.

Songa is also planning to price up to $250 million in a private equity offering with a $25 million subsequent equity offering as part of the refinancing effort.

The convertibles are expected to be priced with a 4% to 6% coupon and with a strike priced of 25% above the equity issue price of NOK 2.50.

If implemented, the refinancing will facilitate successful delivery of the company's CAT-D rigs.

Joint bookrunners of both issues are Fearnley Securities AS and Swedbank Norge, part of Swedbank AB.

The company's largest shareholder Perestroika AS, Christen Sveaas, Fondsfinans Spar and certain other shareholders have guaranteed the private equity placement in full. Perestroika will subscribe for and be allocated shares securing Perestroika and related parties at least a 50.1% ownership post the private placement.

Perestroika also has the right to subscribe for and be allocated bonds in the convertible bond issue in an amount which will allow Perestroika and related parties to maintain an ownership percentage of at least 50.1%, also following a full conversion of the convertible bond.

Songa is an offshore drilling company based in Oslo.

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