Nigeria-focused Seven Energy eyes restructuring after notes default

By Susanna Moon

Chicago, May 15 – Seven Energy International Ltd. said it is looking to carry out a restructuring after failing to cure the default on two series of notes.

The company failed to pay interest due April 11 on its $300 million of 10¼% senior secured notes due 2021 and $100 million of 10½% notes due 2021 and did not satisfy the conditions to pay in-kind interest.

The 30-day grace period expired on May 11, which represents an event of default under the note terms, according to a company update.

The group is being advised by Ernst & Young and has been “in constructive discussions with potential investors and lenders with a view to achieving a comprehensive capital restructuring,” the release noted.

The group said it also “is in parallel discussions with all of its financial creditors, including an ad hoc group of holders of the [10¼% notes who are being advised by Moelis & Co. and White & Case], with a view to obtaining agreements to standstill on debt service obligations and waive any defaults arising under the various finance agreements.”

The liquidity update was provided by Seven and its wholly owned subsidiaries, including Seven Energy Finance Ltd. and Accugas Ltd.

Seven Energy said on April 10 that its short-term liquidity had been “severely affected by a range of external factors” and that the “combination of these adverse external factors has resulted in continued significant pressure on the group’s liquidity.”

As a result, Seven asked for a standstill from its lenders under the $385 million Accugas term facility dated June 23, 2015, after failing to pay interest and principal due on March 31.

Given those “external factors,” Seven Energy said it has not met the conditions to pay in-kind interest on the notes.

The Nigeria-focused energy company is based in Lagos and London.

© 2015 Prospect News.
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