12% yielding four-year bonds were issued in December 2011
Aban Offshore has called a bondholders’ meeting on December 15 seeking an extension on the repayment of part of the outstanding on the bonds issued by its wholly-owned stepdown subsidiary Deep Drilling 1, according to a company statement.
The 12% bonds worth $125 million with a tenure of four years were issued in December 2011 and has been partially redeemed in an aggregate amount of $37.50 million. The outstanding principal amount of $87.50 million matures on December 21, 2015, the company said in the statement.
In the proposed amendments to the bond agreement, Aban Offshore indicated that out of the $87.50 million, it is looking to repay $22.5 million principal along with accrued interest on December 21 which was the original final maturity date while $65 million will be remaining.
The company is proposing to postpone the final maturity to December 21, 2017. The proposed amendments also include quarterly principal repayments of $8.125 million each and an introduction of cash sweep, the statement said.
It also indicated a hike in the interest rate to 15% per annum from December 21 and paid quarterly and proposed to extend the call provision and call premium to the new final maturity date.
The bond issue is secured on a first priority basis in the jack–up rig Deep Driller 1 on contract with Pemex until early September 2016.
Aban Offshore pointed out that payments from Pemex, which is the end user of the rig, are increasingly delayed and the last payment was made in October 2015 for the July drilling. “…no further payments (are) expected in 2015 as Pemex has yet to permit invoicing,” the statement added.
The company stated that by the end of 2015, a total of five months’ hire approximately amounting to $21.5 million at 95% efficiency is expected to be outstanding for the rig.
In October, the company had indicated discussing a possible extension of the bond tenor with the bondholders due to challenging market conditions. “Raising additional common equity in the current market is challenging,” it had said.