Sequa requests consents for 5% convertibles to allow new financing

New York, March 24 – Sequa Petroleum NV began a consent solicitation for its $204.4 million of 5% convertible bonds due 2020 to allow a new financing to go ahead.

The company is requesting approval to:

• Grant security required for the issuance of new bonds;

• Extend the maturity of the convertibles to April 29, 2022 from April 29, 2020;

• Lower the conversion price of the convertibles to $2.50 per share from $3.50 per share;

• Amend the interest rate of the convertibles so that it steps up to 7% on April 29, 2019 and 9% on April 29, 2021; and

• Remove the provisional call from the convertibles allowing Sequa to redeem the convertibles if its shares trade above a 140% hurdle for 30 days out of 45.

Approval of the changes requires votes from holders of three-quarters of the bonds.

The deadline for voting is 11 a.m. ET on April 4.

Sequa announced the planned new financing on March 16, saying that in the “new oil price environment” it intended to pursue a strategy focused on the increased opportunities to acquire, optimize and monetize development and producing assets. Specifically the company is seeking to acquire a 15% interest in the Gina Krog field.

To fund the acquisition, Sequa plans to issue $475 million of secured bonds.

The offering includes $200 million of second-lien senior secured high-yield bonds due 2021 to be issued by subsidiary Tellus Petroleum AS via lead manager and bookrunner Anoa Capital SA.

In addition Sequa Petroleum NV announced $275 million of senior secured first-lien bonds due 2019.

Sequa Petroleum is a London-based energy company.

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