Global Rig seeks from 13% bondholders waiver needed to incur new loan

By Angela McDaniels

Tacoma, Wash., April 9 - Global Rig Co. ASA is seeking a waiver from the holders of its 13% senior secured callable bonds due 2015, according to a notice from bond trustee Norsk Tillitsmann.

The company has been working toward issuing $120 million of new bonds, the proceeds of which would be used to refinance the 13% bonds and take delivery of three new oil and gas drilling rigs from National Oilwell Varco, LP.

However, the company said a fire on one of its rigs has delayed the refinancing, so it now plans to borrow a $13 million short-term loan from Franklin Enterprises - which has agreed to underwrite the new bonds - and use the loan to make an installment payment on the new rigs. The $12.71 million payment is due by May 1.

As security for the short-term loan, the company will assign its rights under the purchase agreement with National Oilwell Varco to Franklin Enterprises.

The company said the payment of the installment and the entry into the loan agreement with Franklin Enterprises would be prohibited by several covenants in the bond loan agreement. The waiver would allow these transactions to move forward.

The covenants in question allow the company to make investments only if at least 40% is financed by new equity, restrict the amount of permitted debt, prevent the granting of new security and restrict the purposes for which cash flow generated from operations of the company's current rigs can be used.

Noteholders will vote at a meeting at 7 a.m. ET on April 28 in Oslo.

The holders of at least half of the bonds must be represented at the meeting in person or by proxy in order to form a quorum, and the holders of more than half of the bonds represented at the meeting must vote in favor of the resolution in order for it to pass.

According to the notice, the holders of more than half of the bonds have confirmed that they will vote in favor of the proposal.

As previously reported, the company received a waiver from the bondholders in January that allowed it to enter into the purchase agreement with National Oilwell Varco.

Global Rig is an onshore rig owner and lessor based in Oslo, Norway.

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