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TTS Group OK’d to extend 8% convertibles; coupon will increase to 12%
By Angela McDaniels
Tacoma, Wash., Dec. 17 – TTS Group ASA received bondholder approval to extend the maturity date of its 8% convertible callable subordinated bonds to April 18, 2017 from Jan. 18, 2016, according to a notice from bond trustee Nordic Trustee ASA.
The bondholders voted at a meeting on Dec. 17. There were enough bondholders present to form a quorum, and the proposal received 100% of the votes cast.
The company sought the extension because it is unable to repay the total outstanding amount in January.
TTS Group will pay an amendment fee of 1%, and the interest rate will increase to 12% after the January interest payment date.
The amendments also introduce a drag-along mechanism to the bond agreement, giving the dragging parties and the issuer the right to require a conversion of all outstanding bonds and a subsequent immediate transfer of shares to the buyer upon the occurrence of an acquisition event at a price above or equal to the current conversion price.
Under a drag-along call option, the issuer will have a right to redeem all outstanding bonds at a price of 105 on the acquisition settlement date.
According to a prior notice, TTS Group’s financial performance has been weaker than expected as a result of poor operational performance in the offshore segment and a very challenging offshore market with low visibility. The trustee said this has resulted in a reduction in the share price, and the bonds are trading out of the money.
The trustee said there have been no conversions of the bonds since 2014. The adjusted conversion price is NOK 4.97. The share price as of Nov. 30 was NOK 3.32.
TTS Group is a Bergen, Norway-based company that designs, develops and supplies equipment for the marine and oil and gas industries.
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