Rem Offshore bondholders’ vote on restructuring scheduled for July 18

By Caroline Salls

Pittsburgh, June 29 – Holders of Rem Offshore ASA’s senior unsecured open bond issue 2013/2018 and senior unsecured open bond issue 2014/2019 will vote on the terms of the company’s restructuring at meetings scheduled for July 18, according to a notice from bond trustee Nordic Trustee ASA.

Rem said earlier this week that the proposed restructuring will create a financial runway for the company through 2019, even in a low-case scenario with limited or no use for its vessels without a long-term contract.

The combined effect of the restructuring is expected to improve Rem’s liquidity by around NOK 3.6 billion over a 3½-year period and reduce net interest bearing debt by roughly NOK 900 million.

At the end of 2019, the company said it will continue to have a strong competitive position, with one of the youngest fleets in the market with an average age of less than nine years.

Restructuring terms

The main terms of the restructuring include the following:

• A private placement of NOK 150 million of new equity at an issue price of NOK 0.87 per share by largest shareholder Åge Remøy. A total of NOK 60 million of the proceeds are expected to be used to buy back part of a new bond issue.

The company said it will, subject to market conditions, consider conducting a subsequent offering of up to NOK 20 million to facilitate equal treatment by inviting existing shareholders not invited to participate in the new equity. The subscription price in the subsequent offering would be the same as for the new equity;

• NOK 60 million of unsecured bonds held by the company as treasury bonds will be cancelled, and NOK 325 million will be converted into shares of Rem Offshore. After the restructuring, the bondholders will own 40% of the company’s shares.

After completion of the debt conversion, the remaining bonds will be exchanged into bonds under a new second-lien bond issue. These bonds will mature in eight years and carry a fixed coupon of 5%, payable in kind.

Rem said it will allocate NOK 60 million of the new equity to carry out a buyback of the new second-lien bonds as a reverse Dutch auction within 30 days after the closing of the restructuring;

• Amortizations on all bank facilities will be reduced from the second half of 2016 to the end of 2019, with a total positive liquidity effect for the company of NOK 1.3 billion. All bank maturities will be extended by 42 months; and

• An existing new-building contract with Vard Group is to be cancelled. In exchange, Vard will receive shares equal to 4% of the total post-restructuring issued shares.

The company said all relevant banks have agreed in principle to the restructuring, subject to relevant credit committee approvals and customary closing conditions.

Before completion of these transactions, the company said its main shareholder plans to restructure its ownership in Rem Offshore.

The fishing and supply shipping company is located in Fosnavaag, Norway.

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