I.M. Skaugen bondholders approve offer to settle buyback dispute

New York, March 29 – I.M. Skaugen SE’s bondholders approved a proposal aimed at settling a disagreement stemming from a buyback of its senior unsecured bond issue 2012/2015 carried out in March 2015, according to a notice from trustee Nordic Trustee ASA.

At a meeting held at 7 a.m. ET on Tuesday in Oslo, sufficient bondholders were present to form a quorum and 77.76% of the votes were cast in favor.

I.M. Skaugen announced on March 10 that it was proposing to make a one-time payment to bondholders of NOK 3.3 million to settle a disagreement over a distribution it made to itself with proceeds from a discount to par of bonds purchased under last year’s tender offer.

I.M. Skaugen held a modified reverse Dutch auction tender offer on March 23, 2015 and March 24, 2015 after a Feb. 23, 2015 bondholders meeting during which certain amendments were passed to the terms of the bonds.

The issuer agreed that if the buyback was completed at any discount to par, the difference should be distributed among bondholders.

The issuer bought back NOK 60 million of the NOK 209 million floating-rate senior bonds at an average price of 72.73 plus accrued interest under the tender offer.

Because the purchase price was a discount to par, about NOK 16.4 million was distributed to the bondholders after the repurchased bonds had been canceled, according to the notice.

I.M. Skaugen said that because it held NOK 191 million of the bonds, it received NOK 9.2 million of the NOK 16.4 million distribution.

Some bondholders objected to I.M. Skaugen receiving a portion of the distribution, but the company says it is “of the clear view that the intention of the 2015 proposal was that all bondholders [including itself] were entitled to the distribution amount and that this is supported by the summons and other written documentation.”

However, the issuer said, in order to avoid a legal dispute and settle the matter amicably, it began discussions with bondholders.

Under the settlement, I.M. Skaugen was proposing a one-time payment of NOK 3.3 million, to be distributed on a pro rata basis to the bondholders, not including itself, as a full and final settlement of the disagreement. The issuer said the proposal does not imply any admission of liability on its part or the part of its advisers.

In order to pass the proposal, holders representing at least 50% of the voting bonds represented at the meeting had to vote in its favor. In order to establish a quorum, holders representing at least 50% of the voting bonds had to be present at the meeting.

The issuer’s financial adviser in relation to the proposal, Arctic Securities AS (Fabian Qvist: 47 21 01 31 91 or Jan Henrik Getz: 47 21 10 32 92), may be contacted for additional information.

I.M. Skaugen is an Oslo-based marine transportation service company engaged in the transportation of petrochemical gases and chemicals.

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