Oro Negro 2015 and 2019 bondholders to vote on bond merger April 18

By Caroline Salls

Pittsburgh, April 11 – Oro Negro Drilling Pte. Ltd. is requesting bondholder approval of an agreement in principle in which the 2015 bonds issued by Oro Negro Impetus Pte. Ltd. would be merged into the company’s 7˝% senior secured bond issue 2014/2019, according to a notice from bond trustee Nordic Trustee ASA.

Although an informal committee of 2015 bondholders has not yet approved the terms of an amended and restated 2019 bond agreement, the trustee said the merger would be conditioned on approval by the 2015 bondholders. The amended 2019 bond agreement must take effect before the merger can be completed.

According to the notice, the merger would be accomplished through the issuance of bonds to each 2015 bondholder in exchange for their 2015 bonds and unpaid interest.

Following closure of the merger, Oro Negro Impetus would become a subsidiary of Oro Negro Drilling and Oro Negro Drilling would receive a security interest in Oro Negro Impetus’ assets, including its Impetus rig.

The bondholders are also being asked to waive a requirement that Oro Negro Drilling maintain a minimum liquidity of $5 million per rig until the completion of the merger and access up to $11.78 million from an issuer earnings account to operate rigs.

The 2015 bondholders are also being asked to extend their bond maturity date to April 30, 2016 and to increase the interest rate after Dec. 4, 2015 to 16%, up from 11% before that date.

If the merger is completed on April 22, the trustee said there would be $937.37 million of 2019 bonds outstanding. The trustee said 2015 bondholders would receive $196.14 million in principal amount of 2019 bonds, and 2019 bondholders would receive $40.24 million in 2019 bonds in exchange for interest due.

The bondholders meetings for voting on the merger proposal are scheduled for April 18.

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

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