Cecon holders allow revisions to 11% bonds for construction financing, with some changes

By Susanna Moon

Chicago, April 28 - Cecon ASA said bondholders approved changes to the bond loan agreement for its 11% senior secured callable and putable bond issue due 2012.

The resolution allows the company to draw on a $200 million construction financing from Export Development Canada under a loan agreement dated April 23. The company said it expects to close on the loan shortly.

Bondholders unanimously voted for the measure at a meeting held on April 28.

After discussions with holders, the proposed resolution from the original summons was modified as follows:

• The baskets for owner furnished equipment financing were deleted;

• The baskets permitting Eksportfinans facility and provisions relating to Eksportfinans security were deleted;

• The trustee may appoint an observer to the board of Cecon, to be approved by bondholders and Cecon, with the right to attend all board meetings and have access to any information about the financial or operating condition of the company;

• AMA Capital Partners will be retained by the trustee until the vessels have been delivered by the yard to the relevant subsidiaries;

• Bingham McCutchen (London) LLC will be retained by the trustee until the vessels have been delivered by the yard to the relevant subsidiaries;

• Noble Denton or another acceptable technical adviser will be retained by the lenders and Cecon, at Cecon's cost, to provide a review of the vessel project;

• The trustee may authorize the coordination agreement only after it has received confirmation from Bingham that it has been reasonably consulted about the amendment agreement and documentation about additional security; and

• Summons to future bondholder meetings must be delivered at least 10 banking days before the date of the meeting, unless they contain a proposal to modify or introduce any priority deed, in which case they must be delivered at least 15 banking days before the meeting.

The company said on April 15 that it distributed a bondholders' meeting summons to request changes in order to secure financing for all the remaining construction costs and expenses for two vessels.

On Jan. 30, the company said it would not be able to make the Feb. 5 interest payments. It had five days to remedy the missed payment, and Cecon's board, management and advisers were then working with Norsk Tillitsmann to evaluate the company's situation.

Cecon is an independent subsea installation contractor located in Arendal, Norway.

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