Mexico’s Oro Negro offers consent fee to bondholders who OK proposal

By Marisa Wong

Madison, Wis., May 18 – Oro Negro Impetus Pte. Ltd. has agreed to pay bondholders a consent fee for approval of the proposal relating to its senior secured bonds due 2015, according to a notice from bond trustee Nordic Trustee ASA.

On May 4, Oro Negro requested a meeting for the holders of its $175 million of senior secured bonds to seek approval to delay the valuation of a rig until Aug. 31.

The company is now offering a consent fee of 0.5% to holders of record as of May 22 who approve the proposal at the meeting to be held on May 19 in Oslo.

As previously reported, the company is currently negotiating a lease contract between the rig’s charterer and Pemex Exploracion y Produccion. Although the determination of the rig’s value will be made “free of any existing charters or other contracts of employment,” the general value of the rig would be influenced by the increase and stabilization of the price of oil, as well as by its prospects for generating revenues in the current market, and thus the issuer wants to obtain the best possible day rate under the lease prior to obtaining a valuation for the rig.

The rig is Oro Negro’s principal asset, and its value is the basis for the secured financing obtained under the bond agreement.

Besides delaying the rig valuation until Aug. 31, the company wants to amend and restate clause 13.7(d) of the bond agreement. The amended and restated clause would require the company to maintain a minimum asset coverage ratio of 120% at all times after Aug. 31.

The company said the implementation of the proposal will ensure that there will be no event of default between May 4 and Aug. 31 caused by delaying the rig valuation or the breach of the terms in clause 13.7(d) of the bond agreement.

The proposal will be passed with the approval of more than two-thirds of the voting bonds (in person or by proxy) present at the bondholders meeting. In order to have a quorum, at least half of the voting bonds must be represented at the meeting.

However, the proposal will only be effective if by June 15 the amendment has been duly executed by the parties, any legal options in relation to the proposal have been delivered and any necessary corporate resolutions of the issuer have been duly made and delivered to the trustee, according to the prior notice.

Moelis & Co. (212 883-3813 or attn: Zul Jamal, zul.hamal@moelis.com) is the financial adviser.

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

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