Blom obtains holder approval to extend bond maturity by two years

By Jennifer Chiou

New York, Oct. 18 - Blom ASA announced that it received bondholder approval to restructure its floating-rate senior secured bonds originally due Sept. 25, 2012, including the extension of the maturity date to Sept. 25, 2014.

Holders of more than 99% of the bonds voted in favor of the proposed amendments, which also included the following changes to

• Allow the company to redeem the bonds in whole or in part at any time at par plus accrued interest;

• Add a cash sweep feature that would obligate the company to redeem a portion of the bonds following any quarter in which its free cash and cash equivalents exceeded NOK 80 million. The first possible redemption under this new feature would be in June 2012;

• Not allow the company or any party over which it has "decisive influence" to acquire and own the bonds;

• Require the company to maintain a minimum interest coverage ratio of 1 to 1. The company would be allowed to remedy a potential breach of this covenant by making an interest payment in kind. However, it will only have this option twice; and

• Delete the book equity ratio clause entirely.

According to a September notice to bondholders from bond trustee Norsk Tillitsmann ASA, a restructuring of the current amortization plan and covenants was needed because the company's current cash generation is not sufficient to meet the amortization plan.

At least half of the outstanding bonds had to be represented at the meeting, and at least two-thirds of the bonds represented at the meeting had to vote in favor of the restructuring in order for it to pass.

The company already said on Sept. 25 that holders of more than 50% of the bonds had already agreed to vote in favor of the restructuring.

In March, the bondholders approved a restructuring that involved a NOK 50 million one-year bond loan and a rights issue that together yielded NOK 64 million of proceeds.

The company said this was regarded as a temporary solution by the parties, and the bondholders granted a waiver to allow sufficient time to "fine tune" a more long-term structure for the bonds. As reported, the waiver will expire on Nov. 18.

Questions may be directed to Dirk Blaauw at 47 22 13 19 20 or Lars Bakklund at 47 22 13 19 34.

Olso-based Blom provides geographical information and services.

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