Renewable Energy ups potential repurchase amount in senior bond offer

By Susanna Moon

Chicago, Aug. 23 - Renewable Energy Co. ASA said it improved the conditional repurchase offer for its senior bonds REC01 maturing in 2014, REC02 maturing in 2016 and REC03 maturing in 2018.

The company now plans to redeem up to the following amounts:

• Up to 100%, up from 60%, of the REC01 bonds at 103% of par;

• Up to 67%, up from 40%, of the REC02 bonds at par; and

• Up to 67%, up from 40%, of the REC03 bonds at par.

The company has set a meeting for the REC01, REC02 and REC03 bondholders on Aug. 27, and holders will vote on the proposed split of the company, according to a press release.

The bond repurchase offer is conditioned on the company's plans to separate its silicon and solar divisions, as previously announced.

Before, the company had planned to redeem up to the following amounts:

• About NOK 390 million, or about 60%, of the REC01 bonds with a cash payment of about NOK 402 million, or at 103% of par;

• About NOK 285 million, or about 40%, of the REC02 bonds at par; and

• About NOK 365 million, or about 40%, of the REC03 bonds at par.

More on background

The repurchases will reduce the company's net debt to about NOK 1.7 billion from NOK 2.2 billion and the 2014 interest payments to about NOK 100 million, according to a press release on Aug. 23.

After the repurchases, the remaining 2014 debt maturity is about NOK 635 million. This will be addressed through available cash, cash flow from operations, issuing of new bonds, a bank credit facility, sale of non-core assets or raising new equity, the company said.

The company has been in the process of restructuring and refinancing the group in order to obtain a better capital structure with reduced debt, lower interest costs and prolonged maturities, the release noted.

Since the peak in 2010, net debt has been reduced by NOK 9.4 billion to NOK 2.2 billion at the end of the second quarter 2013. Annual interest payments are down from NOK 900 million per year in 2010 to about NOK 300 million in 2013.

Another repurchase offer

Renewable Energy said on Aug. 12 that it began an offer to repurchase and exchange up to €112 million of its subordinated unsecured convertible bonds 2009/2014.

The repurchase and exchange is for a principal amount of up to €112 million, including accrued interest since the July 4 payment date, according to a previous press release.

The repurchase and exchange was to be in connection with the issue of a new convertible bond loan maturing in 2018.

The company said it mandated Arctic Securities ASA for the potential issue of up to $110 million principal amount of convertibles due Sept. 13, 2018.

The minimum tender amount is €250,000, or five convertible bond units of €50,000 of par each.

The repurchase and exchange offer was to be settled through a combined cash and exchange settlement as follows:

• About 30% of the offer will be settled in cash of up to about NOK 263 million; and

• About 70% of the offer will be subscription in the new convertible bond loan.

The offer was to run through 10:30 a.m. ET on Aug. 15, with settlement set for Sept. 13.

The company said it will accept notes on a prorated basis if the offer is oversubscribed.

The offer requires approval by shareholders at a meeting slated for Sept. 6.

A voting undertaking has been signed by the company's largest shareholder, UMOE AS, representing 15.5% of the shares, the release noted, and companies controlled by the board members Oystein Stray Spetalen, for 2.9% stake, and Jan Christian Opsahl, for 0.6% stake. In addition, other shareholders representing 11.9% of the company have signed the voting undertaking.

Renewable Energy is a provider of solar electricity services based in Sandvika, Norway.

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