Renewable Energy solicits consents to amend, extend 6.5% convertibles

By Susanna Moon

Chicago, June 22 - Renewable Energy Corp. ASA said it began soliciting consents to amend its outstanding €320 million of 6.5% subordinated unsecured convertible bonds due 2014.

Under the proposal the company is seeking the consent of holders to make the following changes:

• Extend the maturity to June 4, 2017;

• Change the conversion price to NOK 2.7000 per REC share, which was set at a 80% premium to the subscription price in the equity private placement;

• Revise the denomination of each bond to €1 from €50,000 to facilitate the partial redemption of the bonds;

• Reduce pro rata by 40.7% principal amount and number of bonds outstanding so that the principal amount of bonds outstanding will be reduced to 59.3% from 100% and the number of bonds outstanding will be reduced to 189.76 million from 320 million.

For the 40.7% reduction in principal, holders will receive pro rata a cash amount of €93.44 million, which is equal to the nominal value of 29.2% of par plus accrued interest on the entire 40.7% principal amount that was written down; and

• Adjust reference price to NOK 2.1103 and fixed rate of exchange to €1.00 is equal to NOK 7.4960.

No change will be made to the note coupon, which will remain 6.5%.

The consent solicitation will run until 5 a.m. ET on June 29. Settlement is slated for July 23.

The holders are being asked to approve amending the bonds as part of a wider refinancing at a meeting in Oslo on July 3, according to a press release.

More consent offer details

The issuer will pay a voting fee to holders of €0.02 per €1.00 who participate in the offer or is represented at the meeting, if the resolution passes and the company meets the following conditions:

• Closes a NOK 2 billion revolving credit facility with DNB Bank ASA and Nordea Bank Norge ASA;

• Raises minimum net proceeds of NOK 1.25 billion from an equity private placement; and

• Receives approval from shareholders to place the shares and amend the notes.

If any of the conditions have not been met by July 31, then the resolution passed at the meeting will automatically become null and void, the company noted.

The refinancing strategy is aimed at securing the company's long-term industrial position and improving its capital and liquidity position, the release noted. Each component of the refinancing is conditioned on the other components being implemented.

The company said it has been in discussions with "certain large holders" and has secured approval of the proposal from holders of about 23% of the outstanding bonds.

The solicitation agents are Arctic Securities ASA (+47 2101 3100, attn Per-Havard Martinsen, or e-mail phm@arcticsec.no) or Citigroup Global Markets Ltd. (+44 20 7986 8969, attn: equity capital markets/liability management group, or e-mail liabilitymanagement.europe@citi.com).

The loan trustee is Norsk Tillitsmann ASA (+47 22 87 94 00 or e-mail mail@trustee.no).

The information agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, attn: Paul Kamminga / Yves Theis, or e-mail recgroup@lucid-is.com).

OK to shutter REC unit

In a separate press release, the company said bondholders agreed to terminate REC Wafer Norway AS as a guarantor of three series of its notes at a meeting held Friday.

The consents were needed under the company's 11% bonds due 2014, floating-rate bonds due 2016 and 9¾% bonds due 2018 in order to shut down the subsidiary's operations.

Renewable Energy is a Sandvika, Norway-based company active in the solar energy sector.

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