Sevan Marine's restructuring plan gets approval of bondholders

By Angela McDaniels

Tacoma, Wash., Nov. 14 - Sevan Marine ASA's bondholders voted in favor of a restructuring plan at a meeting on Nov. 10 in Oslo, according to a company news release.

The bonds covered by the meeting were the company's NOK 870 million of floating-rate senior secured callable bonds due 2012, $270 million of floating-rate senior secured callable bonds due 2013, NOK 700 million of 14% callable senior unsecured bonds due 2014, NOK 625 million of senior secured bonds due 2015, $100 million of senior secured bonds due 2015 and 15% callable senior secured bridge loan bonds due 2012.

Affirmative votes were needed from the holders of two-thirds of the bonds of each class represented at the meeting. Approval is still needed from a majority of the issuer's shareholders. A shareholder meeting was scheduled for Nov. 14.

At a meeting on Aug. 5, the holders voted in favor of a proposal to, among other things, defer interest payments and to introduce a standstill period until Sept. 30 in order to allow the issuer to continue its operations while seeking to reach an agreement with its major stakeholders about a long-term restructuring solution.

On Oct. 18, the issuer and the holders of more than two-thirds of the outstanding bonds of each series agreed on the terms of the restructuring, and the bondholder group agreed to support the implementation of the plan under a lock-up agreement.

The standstill period will continue until the restructuring is completed.

As previously reported, the key elements of the restructuring include the following:

• The company's Hummingbird, Piranema and Voyageur floating production storage and offloading units will be sold to Teekay Corp. for $668 million, of which $438 million will be used to settle the secured bonds;

• The unsecured bonds will be settled in full via (a) either the transfer of the issuer's 96 million shares in Sevan Drilling ASA to the unsecured special-purpose vehicle or the payment of the unsecured bondholders of the balance of the proceeds received from a sale of the shares after all of the debt under the bridge loan bonds has been repaid and (b) the issue to the unsecured bondholders of 10% of the pro forma share capital of the issuer following the restructuring by way of a debt-for-equity conversion;

• Teekay will subscribe for $25 million of Sevan shares, giving it 40% of the issuer's post-restructuring shares. In addition, up to $25 million of new shares will be offered to existing shareholders and the unsecured bondholders, giving them 40% of the issuer's post-restructuring shares;

• Before Teekay purchases the Voyageur floating production storage and offloading unit, it will extend a bridge loan to Sevan, which will use the proceeds to complete the upgrade of the unit.

Sevan Marine is an offshore drilling company based in Arendal, Norway.

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