Oro Negro bondholders called to meeting to consider removing trustee

New York, Jan. 30 – Oro Negro Impetus Pte. Ltd.’s bondholders have been called to a meeting to consider removing trustee Nordic Trustee ASA.

The meeting was called by Clearwater Capital Partners Pacific IV, Ltd., which holds between 10% and 15% of the bonds, according to a notice from Nordic Trustee.

Clearwater is asking holders of Oro Negro’s 11% senior secured bond issue 2014/2015 to consider whether the trustee “acted appropriately and in accordance with the bondholders’ best interests when reacting to information provided by Clearwater’s counsel,” the notice said.

The meeting will vote on whether to replace the trustee with a new trustee and the security agent with a new security agent.

At least half of the bonds must be represented at the meeting for there to be a quorum and at least 2/3 must vote in favor for the resolutions to be passed.

The meeting will be held on Feb. 12 at 10 a.m. ET.

If the resolutions are adopted, a further meeting will be held to elect a new trustee.

In response to the criticism, Nordic Trustee said that it acted “based on thorough assessments and qualified external legal advice.”

Oro Negro previously stated that “a minority bondholder” – who was not identified – was claiming that a material adverse effect under the bond indenture occurred when the company took delivery as planned of its new rig, the Impetus, on Jan. 22.

That same bondholder requested bond trustee Nordic Trustee ASA to summon a bondholder meeting to discuss certain company matters and to request that the trustee be replaced, according to a company news release. That summons has since been withdrawn, the company said.

According to Oro Negro, January is the seventh consecutive month of declining oil prices, and the reduced price was adequately reflected by a discount rate of 97% and the 11% coupon on the bond issuance.

Any potential interference by a bondholder in the operation and management of the company could impair the price of the bond, the company said.

According to the press release, the company’s business strategy remains the same, as it is well positioned in the market and is in negotiations for a drilling contract for the Impetus. It remains confident in its “ability to meet all obligations under the finance documents and therefore strongly opposes the statement by certain bondholders regarding the existence of a material adverse effect.”

The oil and gas services company is based in Alvaro Obregon, Mexico.

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