Cecon gets holder support for another waiver under four bond series

By Susanna Moon

Chicago, Aug. 9 - Cecon ASA said that it received an extension of a waiver for four series of senior secured callable and putable bonds at a meeting held on Aug. 9.

There were enough holders for a quorum, and the measure received 100% of votes, according to a company press release.

The four bond series are the tranche A 5% bonds due 2013 with warrants, the tranche B 8% bonds due 2016, the tranche C1 8% bonds due 2016 and the tranche C2 8% bonds due 2016.

Cecon said on July 26 that it sought the waiver extension after the termination of a standstill agreement with Export Development Canada. At the time, the company had received "pre-consents" from holders of about 51.5% of its tranche A 5% bonds, 63.4% of its tranche B 8% bonds and 38.3% of its tranche C1 8% bonds.

Under a recent restructuring, the company secured a waiver for cross defaults during the term of the standstill agreement.

After the agreement ended, the potential defaults could "create obstacles for the group in relation to further financings, new business opportunities and its continuing efforts to arrange completion of the vessels under construction at Davie Yards in Canada," the company said in a previous press release.

On March 4, Cecon said it obtained full subscription to its previously announced private placement of a $5 million and $7 million new bond loan, with the final allocation set for later that day.

When the placement was announced on Feb. 22, Cecon said that the bonds and the attached warrants would have two-year terms, the coupon of the bonds would be 5% and the exercise price of the warrants would be NOK 0.65.

The company announced in February that bondholders were to vote on a refinancing and restructuring term sheet on March 2.

As previously reported, the term sheet was negotiated between a bondholder group representing the largest bondholders and some Cecon shareholders. As announced at that time, the company's current bond debt consists of a $100 million five-year bond loan issued by Cecon Shipping 1 AS and Cecon Shipping 2 AS and a $12.5 million one-year bond loan issued by Cecon.

The company owed interest to the bondholders.

Under the term sheet, holders of the bond loans were to receive a partial settlement of their loans and accrued interest.

Specifically, an amended $73.13 million 8% five-year bond loan were issued to holders of both bond loans.

In addition, a total of $56.11 million of debt were settled by issuance of 49.5 million new shares.

Cecon said in February that holders of 63% of the shares had agreed to support the term sheet, and 54.8% of the bondholders had pledged their support.

The independent subsea installation contractor is located in Arendal, Norway.

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