North American Energy to retire $170 million 9 1/8% notes due 2017

By Susanna Moon

Chicago, July 23 - North American Energy Partners Inc. said it plans to apply up to $170 million from its asset sale to reduce debt under its outstanding 9 1/8% series 1 senior debentures due 2017.

First, the company will make an offer under the note terms to use the excess proceeds from the piling asset sale to purchase the notes at par under the note terms, according to a press release.

The offer will end at 5 p.m. ET on Aug. 21, with settlement set for Aug. 23.

After that, the company will redeem an amount of notes on Aug. 27 equal to $150 million less the aggregate principal amount of notes tendered under the net proceeds offer.

The redemption price will be 104.563% of par plus accrued interest to but excluding the redemption date of about $35.50 per $1,000 principal amount of notes. Holders must be of record as of Aug. 23.

Any notes not tendered under the net proceeds offer will be redeemed on a pro rata basis at a price of $1,045.63 for each $1,000 principal amount plus accrued interest.

The company plans to retire between $150 million and $170 million of notes.

"We are taking this approach to satisfy the indenture requirement to use surplus proceeds from the piling asset sale to offer to buy the bonds at par, which bond holders may choose to accept, and reduce our overall debt," David Blackley, the company's chief financial officer, said in the press release.

The company said it may consider its refinancing options for the remaining outstanding principal amount of notes after completion of the net proceeds offer and redemption.

North American Energy is a Calgary, Alta.-based provider of heavy construction, mining, piling and pipeline services in western Canada.

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