Blom bondholders approve restructuring proposal at Tuesday meeting

By Toni Weeks

San Diego, April 24 - Holders of Blom ASA's senior bond issue 2009/2012 and senior bond issue 2011/2012 approved at an April 24 meeting a proposed restructuring, according to a notice from bond trustee Norsk Tillitsmann.

Enough bondholders to form a quorum for each series were present at the meeting, and the restructuring received 100% of the votes cast for both note series.

As previously reported, under the restructuring, the 2009 bond issue will be converted into Blom shares.

The 2009 bondholders were previously offered the right to exchange their bonds for new 2% subordinated convertible bonds due April 30, 2017 at an exchange ratio of 31 new bonds for every 100 of existing bonds converted.

The initial conversion price for the new convertible bonds will be 20% above the volume-weighted average trading price of Blom's shares on the first two trading days after an extraordinary general meeting scheduled for April 25.

The exercise period of the new bonds will run through April 30, 2014.

Exchange offer

The exchange offer, which launched April 10 and expired April 19, was subject to a maximum principal amount of NOK 40 million, meaning the maximum size of the new subordinated convertible bond loan will be NOK 12.4 million.

All 2009 bonds not acquired by Blom through the exchange offer will be converted into shares of the company at a conversion price of NOK 10 per share.

Norsk Tillitsmann said accrued interest would also be part of the conversion, meaning the minimum amount to be converted if all bonds are converted would be NOK 306.13 million, and the maximum amount would be NOK 346.13 million.

2011 bond changes

In addition, the terms of the 2011 bond issue will be amended as follows:

• The maturity date will be extended to April 30, 2015 from June 4, 2012;

• The margin will be changed to 5.5% from 11%;

• An existing intercreditor agreement will terminate upon conversion of the 2009 bonds;

• A €5 million guarantee from Blom CGR SpA will be released;

• A bank account pledge will be released; and

• The trustee will be authorized to enter into an intercreditor agreement with Blom that includes provisions for full subordination of the 2011 bonds, except for payment of ordinary interest if no default has occurred, and no enforcement rights on the 2011 bond issue while the new bond issue is outstanding.

Short-term financing

The trustee said that Blom will be able to obtain additional short-term financing in the form of new bonds or other short-term financing during 2012 in the maximum amount of NOK 30 million.

The short-term financing will have a term of no longer than nine months.

If the short-term financing is secured through a new bond issue, the 2011 bondholders will have a preferential right to subscribe for those bonds.

Oslo-based Blom provides geographical information and services.

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