Sea Production solicits consents to extend maturity date of bonds

By Marisa Wong

Madison, Wis., July 10 – Sea Production Ltd. is seeking to extend the maturity date of its callable senior secured bonds, issue 2007/2012, according to a notice from bond trustee Nordic Trustee ASA.

The company is proposing a short-term extension of the maturity date to Sept. 14, 2015 from July 14, 2015.

The company wants to work out the deployment of its two vessels, Front Puffin and Crystal Ocean, before figuring out how to repay or refinance the bonds.

The vessel Front Puffin is currently in the yard in Singapore preparing to be deployed to Nigeria with estimated arrival by year-end.

The company is still in discussions on the deployment of Crystal Ocean. The company has negotiated with charterers a three-year extension to the period of Crystal Ocean’s contract for deployment in the Gulf of Mexico. The charterers are currently in discussions with Pemex regarding an extension of their own arrangements for the vessel, which will affect their agreement with Sea Production.

In consideration for amending the bonds’ maturity, the issuer has agreed to increase the interest rate as follows: from May 14 to Aug. 14, the applicable margin will be 17.5% per annum and from Aug. 14 to the new maturity date, the applicable margin will be 18.5% per annum.

If the company is unable to make the interest payment due to insufficient cash, it may make payments in kind. The PIK margin will be 30% per annum from May 14 to Aug. 14 and 32% per annum from Aug. 14 to the new maturity date.

The company is also offering a consent fee to bondholders who approve the maturity extension.

Bondholders will vote on the proposed amendment at a meeting on July 17 in Oslo.

At least half of the voting bonds must be represented at the meeting. To approve the resolution, holders representing at least two-third of the bonds represented must vote in favor of the proposal.

Sea Production makes floating production storage and offloading units and floating storage and offloading units. The company is based in Oslo.

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