Mexico’s Oro Negro asks 11% noteholders for $2.25 million to pay bills

By Susanna Moon

Chicago, March 10 – Oro Negro Impetus Pte. Ltd. is asking holders to approve a waiver proposal under its 11% first-priority senior secured bonds due Dec. 4, 2015.

Specifically, the issuer is asking for access to up to $2.25 million in the liquidity account until April 8 to fund budget expenses of up to $2.15 million, according to a notice from bond trustee Nordic Trustee ASA.

The issuer also needs cash for emergency operating expenses not specified in the budget, subject to the overall limit on withdrawals from the liquidity account of $2.25 million, the notice added.

The issuer is required to maintain a minimum cash balance of $5 million in the liquidity account.

A bondholders meeting has been set for March 29 in Oslo.

To pass, at least two-thirds of the bonds represented at the meeting must vote in favor of the measure. To form a quorum, at least half of the voting bonds must be represented at the meeting.

As reported Dec. 4, the company failed to redeem the bonds on the Dec. 4, 2015 maturity date.

At the time, the trustee said an informal group of bondholders was in a continuing dialogue with Oro Negro to find a solution to be presented to bondholders.

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

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As announced March 4, Oro Negro also is asking holders of its 7˝% senior secured bonds due 2019 for access to funds held as part of a minimum liquidity requirement under a restructuring plan.

The trustee said Oro Negro and an informal committee of bondholders had reached an agreement in principle in connection with a restructuring agreement that would amend the terms of the bonds.

At a meeting scheduled for March 21, the bondholders are being asked to waive until April 8 a requirement that Oro Negro maintain a minimum liquidity of $5 million per rig and to allow the company to use the funds in the issuer earnings account for the operation of the business associated with the rigs.

Under the company’s proposed global restructuring term sheet, Oro Negro’s 2015 bonds and 2019 bonds would be combined into a $921.4 million combined secured facility.

A 103% make-whole payment would be due upon a refinancing, repayment or acceleration.

Also under the proposed term sheet, shareholders would fund shareholder settlement payments, and the company would enter into a receivables factoring facility. The term sheet calls for payment of $31.9 million of interest on the 2019 bonds and $8 million of interest under the 2015 bonds from the first $39.9 million of receivables factoring facility proceeds.

In addition, Oro Negro’s parent will be permitted to use up to $25 million of unrestricted cash to fund operating and restructuring expenses.

No dividends will be paid to shareholders while the bonds are outstanding, the term sheet said.

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

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