NorAm asks to suspend debt service covenant for 9% bonds due 2019

By Susanna Moon

Chicago, April 10 – NorAm Drilling Co., formerly Global Rig Co. AS, is seeking waivers until year’s end for its 9% senior callable bonds due 2019.

Specifically, the company is asking holders to waive the requirement to comply with the debt service covenant for the rest of the year ending December 2017, according to a notice from bond trustee Nordic Trust ASA.

Due to a cash shortfall, the company may be unable to meet or have difficulty meeting the financial covenants that require it to deposit on the second day of each month one-sixth of the amount needed for the next interest payment, the release noted.

The group’s current cash position was about $12.7 million at the end of March, of which $6.9 million was in the debt service reserve account.

A bondholders meeting has been scheduled for April 28 in Oslo.

Bondholders representing more than two-thirds of the bonds have agreed to vote in favor of the proposed changes.

To pass, the proposed changes must be approved by bondholders representing more than two-thirds of bonds represented at the meeting. To form a quorum, at least half the voting bonds must be represented at the meeting.

Bondholders may authorize Nordic Trust ASA (+47 22 87 94 10 or mail@nordictrustee.no) to vote on their behalves.

The bonds were issued in 2014.

NorAm is a Houston-based onshore drilling company. Global Rig, the previous parent company to NorAm, was an onshore rig owner and lessor based in Oslo.

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