Golden Close Maritime gets holder consents to restructure 9% bonds

By Susanna Moon

Chicago, March 17 – Golden Close Maritime Corp. Ltd. obtained bondholder support to restructure its $400 million 9% senior secured callable bonds due 2019 at the meeting held Friday in Oslo.

There were enough holders to form a quorum, the measure received votes for 95.48% of those cast, according to a notice from trustee Nordic Trustee ASA.

Golden Close said on Feb. 27 that it was asking for the changes because it needs improved liquidity in order to secure and fulfill new contracts for the drillship.

The company had entered into negotiations with the drillship manager and the holders of a majority of the bonds about a restructuring proposal that includes the following measures:

• Settlement of $45 million of accrued interest on the senior secured bonds in kind;

• Conversion of $45 million of senior secured bonds into shares at a conversion price of $1, allocated pro rata among the bondholders;

• A reduction of the drillship manager’s fixed fee and allocation of administration cost until the end of 2020, in exchange for $40 million of new senior secured bonds;

• The deletion of a requirement in the current management agreement for a $5 million reserve on the drillship manager’s operating accounts. Instead, the company will issue $6 million of additional bonds to the drillship manager to serve as security for operating costs in case of expiry or termination of the management agreement. These bonds will rank ahead of the company’s other bonds;

• A settlement of $340 million of the senior secured bonds through exchange into zero-coupon five-year non-callable subordinated convertible bonds with a conversion price of $1 per share.

• Amendments to the bond agreement to allow for in-kind interest payment and the deletion of financial covenants;

• The company may if needed obtain a $20 million performance guarantee facility; and

• The company will enter into a new super senior secured bond agreement for the issue of up to $50 million of bonds by way of tap issues. The interest rate will be 10% if paid in cash and 15% if paid in kind. The initial tranche is expected to be in the amount of $10 million. The subscription period will be March 13 to March 21.

Following these steps, $100 million of the senior secured bonds will remain outstanding. They will mature five years after the effective date. The interest rate will be 8% if paid in cash and 12% if paid in kind.

The holders of at least half of the bonds needed to be present at the meeting in order to form a quorum, and the holders of at least two-thirds of the bonds needed to vote for the proposal.

As previously reported, on July 12, 2016, the bondholders provided waivers of interest payments and interest retention, amortizations, events of default related to the market downturn, such as financial covenants, and some restrictions on the company’s use of cash.

Golden Close owns and operates the drillship Deepsea Metro I in Tanzania and Kenya. It is based in Bergen, Norway.

© 2015 Prospect News.
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