Mexico’s Oro Negro gets needed votes to amend secured bonds due 2015

By Susanna Moon

Chicago, Sept. 1 – Oro Negro Impetus Pte. Ltd. obtained the needed votes at a bondholder meeting to amend its $175 million senior secured bonds due 2015.

There were enough holders to form a quorum, and the measure obtained votes from 87.48% of the votes cast, according to a notice from Nordic Trustee ASA.

As noted before, to approve the proposal, holders representing more than two-thirds of the bonds at the meeting needed to vote for it. In order to have a quorum, half of the voting bonds needed to be represented at the meeting.

The meeting had been set for Aug. 31 in Oslo, extended from Aug. 27, according to a letter to bondholders on Aug. 28.

As previously announced, Oro Negro made changes to the consent solicitation after negotiations with the advisers for an ad hoc group of bondholders.

The changes included the following:

• Removed the request for access to funds in the liquidity account for the purposes of paying operational expenses and the fees and expenses of the advisers of the ad hoc group and the bond trustee. As a result, the company will continue to pay the operating expenses for its Impetus rig during the extension period;

• Agreed to limit payments from the company to the extent such funds will not be used to pay the ordinary course operational expenses of the company;

• Agreed to, among other things, limit the company’s ability to give security interests or guarantees in favor of the holders of the company’s 7½% senior secured bonds due 2019 during the effectiveness of the proposed amendments and to deliver additional security documents with respect to the share charge and parent share charge that have been requested by the ad hoc group; and

• Reduced the waiver period to roughly 30 days from 60 days.

As previously reported, the ad hoc group of bondholders said on Aug. 24 that it would vote down the company’s proposal to change the bond terms unless the company made changes to the proposal.

The company also sought approval to

• Delay the third interest payment date to Sept. 30;

• Extend the previous amendments to the minimum equity ratio and minimum asset coverage ratio clauses to apply after Sept. 30;

• Waive the requirement to obtain a valuation of the rig until Oct. 1; and

• Extend the operation of the cross-acceleration provision to Sept. 30 from Aug. 31.

The amendments relate to the company’s negotiation of a lease contract between the charterer for its Impetus rig and Pemex Exploracion y Produccion.

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

The company continues to be in discussions with Pemex about the possibility of procuring a drilling contract for the rig.

The company and Pemex have signed a letter under which Pemex agreed to use its best efforts to satisfy the conditions and approvals necessary for a contract no later than Nov. 30.

However, Oro Negro said Pemex will not intend to provide a new contract if the “bondholders are not supportive of the efforts of the issuer to create a more sustainable capital structure.”

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

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