SBX - Agreement for financial restructuring and industrial partnership
2011-11-18, 11:28
Cyprus, 18 November 2011 - Reference is made to the stock exchange notices dated
8 August 2011 and 3 October 2011 regarding SeaBird Exploration PLC's ("SeaBird"
or the "Company") evaluation of financing alternatives and the signing of a
letter of intent (the "LOI") with Fugro Norway AS ("Fugro") regarding sale of
the OBN business. SeaBird is pleased to announce that it has now entered into a
share and purchase agreement (the "SPA") with Fugro on 18 November 2011.
In order to complete the Fugro Transaction (as defined below) SeaBird has
approached Norsk Tillitsmann ASA (the "Bond Trustee") with a proposal to be put
forward to the bondholders in the SBX01 RET (ISIN 001 032604.4) and SBX02 RET
(ISIN 001 035391.5) (collectively the "Bond Loans"), comprising a restructuring
of the Company's financial debt, as described below (the "Restructuring Plan").
The Company has also approached the bondholders in the Perestroika convertible
loan (the "Perestroika CB") and the PGS convertible loan (the "PGS CB")
(collectively including the Bond Loans, the "Unsecured Creditors") to attain
their acceptance of a plan for restructuring of the Company (the "Restructuring
Plan").
The Restructuring Plan comprises the following elements (as described below):
i. The Fugro Transaction
ii. The New Equity
iii. The Use of Proceeds
iv. The Exchange Bond
Bondholders representing over 2/3 of both Bond Loans, the bondholder under the
Perestroika CB and the bondholder under the PGS CB have granted their pre-
acceptance to the Restructuring Plan.
Fugro Transaction
As set out in the SPA, Fugro will acquire SeaBird Technologies AS and Seabed
Navigation Co Ltd which collectively hold all of the Company's rights and assets
related to the OBN business for the agreed acquisition price of USD 125 million
(the "Fugro Transaction"). In addition, the Company will enter into a time
charter agreement with Fugro for the vessel Munin Explorer for a firm period of
three years and a further time charter agreement for a second vessel for a firm
period of one year, plus one year plus one year in charterers' option. The
contract value for the firm part of these two contracts will be in the range of
USD 75 million. The Company will also provide services to Fugro required to
operate the OBN business for a firm period of 6 months plus 6 months at Fugro's
discretion.
The SPA includes certain conditions precedent for closing of the Fugro
Transaction, such as inter alia that the Company will continue as a going
concern following the Fugro Transaction and that key creditors agree on
distribution of proceeds from the Fugro Transaction. The Fugro Transaction is
expected to close within two to four weeks.
New Equity
SeaBird has approached its existing key shareholders and proposed to raise new
common equity in conjunction with the Fugro Transaction and the debt
restructuring. The Company has received pre-subscriptions for USD 6 million in
new Equity (the "New Equity") at a subscription price of NOK 0.25 per share. The
equity proceeds, together with the proceeds from the Fugro Transaction will be
used to redeem financial indebtedness and strengthen the Company's liquidity
position. The Company expects to call for an EGM to be held on or about 8
December 2011.
Use of Proceeds
At the time of entering into the LOI, Fugro acquired 11% of the two OBN
subsidiaries, SeaBird Technologies AS and Seabed Navigation Co Ltd, and
transferred USD 13.75 million to the Company. This was required to improve the
Company's liquidity situation during the due diligence phase. About USD 4.7
million of the USD 13.75 million was used to reduce the Sparebanken 1
SMN/Glitnir and the Standard Chartered Bank facilities (the "Senior
Facilities"), while the remaining has been used to repay overdue trade creditors
and to improve the Company's working capital position.
The Company intends to use the remaining proceeds (89%) from the Fugro
Transaction and proceeds from the New Equity to (the "Use of Proceeds") inter
alia (i) repay the Senior Facilities in full, (ii) repay overdue trade creditors
to an acceptable level, (iii) retain a working capital and liquidity buffer for
the Company of USD 12.5 million, and (iv) partially redeem the Unsecured
Creditors on a pro rata basis with all remaining proceeds, expected to give a
partial redemption of around 32% of the principal amounts (the "Partial
Redemption").
The Exchange Bond
To implement the Restructuring Plan, holders in each of the Bond Loans and the
PGS CB are asked to accept a mandatory exchange of their remaining bonds
(following the Partial Redemption), including accrued and unpaid interest held
as at the exchange date, into a single new senior secured USD denominated bond
(the "Exchange Bond"). The Exchange Bond will have a tenor of 4 years and carry
a coupon of 6.00% p.a., with semi-annual interest payments. The Exchange Bond
will inter alia be granted first priority security in the four wholly owned
vessels, Harrier Explorer, Aquila Explorer, Osprey Explorer and Northern
Explorer. The expected size of the Exchange Bond is USD 92 million, dependent on
the USD/NOK exchange rate at the exchange date and the final Partial Redemption.
The Company expects to summons for bondholders' meeting on or about 23 November
2011, with the bondholders' meetings to take place approximately one week later.
Conditions
The completion of the Restructuring Plan as presented above is conditional and
subject to certain conditions precedent being satisfied within 31 December
2011, such as inter alia:
a. Bondholder Meetings in each of the SBX01 Bond and the SBX02 Bond approving
the Restructuring Plan;
b. The PGS CB approving the Restructuring Plan and approving a similar
restructuring plan of outstanding principal and accrued interest under the
PGS CB;
c. The Perestroika CB approving the Restructuring Plan and approving to remain
in the Perestroika CB at current terms following the pro rata Partial
Redemption;
d. The Company has made all the necessary corporate resolutions required to
implement the Restructuring Plan;
e. Minimum USD 6.0 million in New Equity;
f. No new information with respect to the Issuer is disclosed before
implementation of the Restructuring Plan, resulting in material adverse
change in the premises on which the Restructuring Plan is intended; and
g. Until the restructuring is completed, the bondholders waive any Event of
Default having occurred or threatening under the bond agreements of the Bond
Loans.
For further information, please contact:
Tim Isden
CEO SeaBird Exploration
Phone: +971 504 539075
SeaBird Exploration PLC "SeaBird" is a global provider of marine solutions for
seabed acquisition of 3D/4C/4D multimode seismic data with OBN operations,
marine 2D and 3D seismic data, and associated products and services to the oil
and gas industry. SeaBird specializes in high quality operations within the high
end of the source vessel and 2D market, as well as in the shallow water 2D/3D
market. Main focus for the company is proprietary seismic surveys (contract
seismic). Main success criteria for the company are an unrelenting focus on
Health, Safety, Security, Environment and Quality (HSSEQ), combined with
efficient collection of high quality seismic data.
All statements in this press release other than statements of historical fact
are forward-looking statements and are subject to a number of risks,
uncertainties and assumptions that are difficult to predict, and are based upon
assumptions as to future events that may not prove accurate. These factors
include SeaBird`s reliance on a cyclical industry and the utilization of the
company's vessels. Actual results may differ substantially from those expected
or projected in the forward-looking statements.
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
[HUG#156489