PA Resources gets waiver needed to issue SEK 1 billion new bonds

By Susanna Moon

Chicago, July 9 - PA Resources AB said it obtained a waiver needed from existing bondholders in order to issue up to SEK 1 billion of new bonds.

Bondholders voted to pass the measure at a meeting in Oslo at 9 a.m. ET on June 28.

The company sought the waiver from the holders of its NOK 900 million of bonds issued in April 2011 and its SEK 850 million of bonds issued in December 2010, according to a notice on June 14 from bond trustee Norsk Tillitsmann ASA.

Under the terms of the bonds, the company is required to maintain at least SEK 2 billion of equity. However, the company said it might not be able to meet this requirement for the second quarter, which would trigger an event of default.

As previously announced, the company plans to raise about SEK 891 million through a rights issue and to refinance the amount outstanding of the Swedish krona-denominated bonds that will mature in October 2013 with up to SEK 1 billion of new bonds.

Two institutional investors have committed to buying more than half of the proposed bond issue, subject to the terms and conditions of the new bonds being similar to those of the existing Swedish krona-denominated bonds.

The company said the rights issue and the bond issue will allow it to repay the Swedish krona-denominated bonds at maturity and significantly reduce its exposure risk.

The rights issue and the bond issue were conditioned on the bondholders approving the requested waiver and amendment.

The company asked the bondholders to waive any default or cross-default that may result from the non-compliance with the minimum equity requirement and to approve a reduction in the minimum amount of equity required to SEK 1 billion from SEK 2 billion.

The minimum equity requirement for the new bonds will be SEK 1 billion.

The waivers will expire on July 19 or once the company notifies the trustee that it is in compliance with the minimum equity requirement, whichever comes first.

Bondholders representing at least two-thirds of the bonds represented in person or by proxy at the meeting needed to vote in favor of the waiver and amendment. At least half of the bonds needed to be represented at the meeting to form a quorum.

PA Resources is an oil and gas company based in Stockholm.

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