Aban Offshore arm receives nod for bond pact changes

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Mumbai | Updated: December 17, 2015 1:12:19 AM

Company had proposed to postpone the final maturity to Dec 21, 2017

Aban Offshore on Wednesday said in an exchange filing that the agreement with regard to bonds issued by Deep Drilling 1 — a wholly owned step down subsidiary — will be changed following a meeting with bondholders on Tuesday.

“There were sufficient bondholders present at the meeting to form a quorum. The proposed resolution obtained 90.58% of the votes, and the proposal was adopted according to the voting requirements of the bond agreement. The bond agreement will, therefore, be changed as set out in the summons  to the meeting,” the statement said.

Aban Offshore had called a meeting of bondholders on Tuesday seeking extension on repayment of part of the outstanding on the bonds issued by Deep Drilling 1.

The 12% bonds worth $125 million with a tenure of four years were issued in December 2011 and have 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 had said in a statement.

In the proposed amendments to the bond agreement, Aban Offshore had indicated that of $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 had also proposed to postpone the final maturity to December 21, 2017. The proposed amendments also included quarterly principal repayments of $8.125 million and introduction of cash sweep.

It had 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 had said payments from Pemex, which is the end user of the rig, are increasingly delayed and the last payment was made in October 2015 for drilling in July. “…no further payments (are) expected in 2015 as Pemex has yet to permit invoicing,” the statement added.

The company had 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 tenure with bondholders due to challenging market conditions. “Raising additional common equity in the current market is challenging,” it had said.

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