As discussed in Rem Offshore ASA's ("Rem Offshore"
or the "Company") financial report for Q1 2016, the Company is
working on an overall restructuring plan to strengthen the
Company's balance sheet and liquidity position going forward (the
"Restructuring").
The Company has over the past months been in
dialogue with its bank lenders, larger bondholders, and main
stakeholders. Based on this, the Company has agreed in-principle on
the main terms for a Restructuring with those stakeholders.
The Restructuring will create a financial runway
for the Company through 2019, even in a low case scenario with
limited or no utilisation for the vessels without long term
contract. The combined effect of the Restructuring described below
is expected to improve the Company's liquidity by around NOK 3.6
billion over a 3.5 year period, and reduce the net interest bearing
debt by approximately NOK 900m. At the end of 2019, the Company
will continue to have a strong competitive position, with one of
the youngest fleets in the market with an average age of less than
nine years.
The Restructuring includes the following main
terms;
- New equity:
A private placement of NOK 150 million at an issue price of NOK
0.87 per share, by the largest shareholder Åge Remøy (the "New
Equity"). NOK 60 million of the proceeds planned used to buy-back
part of the new bond issue (the "New 2nd Lien Bond
Issue"), as described below.
The Company will, subject to inter alia market conditions, consider to conduct a
Subsequent Equity Offering (the "Subsequent Offering") of up to NOK
20 million for the purpose of facilitating equal treatment by
inviting existing shareholders not invited to participate in the
New Equity the opportunity to subscribe for new shares in the
Company. New investors may be allowed to subscribe in such
Subsequent Offering, but existing shareholders will be given
preference. The subscription price in the Subsequent Offering shall
be the same as for the New Equity, NOK 0.87 per share.
The Subsequent Offering will, if executed, be
launched following the necessary approval of the Restructuring by
the Company's banks, bondholders, creditors and shareholders, and
subject to regulatory approval of an offering and listing
prospectus as well as the requisite corporate resolutions. The
further terms and particulars of the Subsequent Offering will be
announced in due course, and described in the prospectus to be
prepared in connection therewith.
Prior to implementation of the Equity Offering,
the Subsequent Offering and the issuance of shares to Vard (as
further described below) the par value of the Shares, currently NOK
1 per share, will need to be reduced to allow for issuance of new
share at NOK 0.87 per share. The Board of Directors will propose to
the general meeting that such reduction is approved in connection
with the decision to implement the Equity Offering and the
Subsequent Offering. Further details will be announced in due
course in connection with the notice for such extraordinary general
meeting.
- Unsecured
bonds: NOK 513.5 million in aggregate face value of the senior
unsecured bonds (NOK 188.5 million of REM 04 PRO (ISIN NO 001
067283.5) after cancellation of the NOK 60m held by the Company as
treasury bonds and NOK 325 million of REM 05) (ISIN NO 001072023.8)
to be converted into shares in Rem Offshore (the "Debt
Conversion"). Post Restructuring (incl. for the avoidance of doubt,
the New Equity, but before the Subsequent Offering), the
Bondholders will own 40% of the issued Shares of the Company.
After completion of the Debt Conversion, the
remaining Bonds (NOK 276.5 million in aggregate par value) shall be
exchanged into bonds in the New 2nd Lien Bond
Issue. The bond will have an 8 year tenor, a fixed coupon of 5.0%
p.a. payable as PIK interest and no financial covenants. The bond
will be secured by a second lien mortgage over the vessel "Rem
Star" and a first lien pledge over all shares issued by Rem
Maritime AS.
The Company will allocate NOK 60 million of the
New Equity (as defined above) to carry out a buy-back of the New
2nd Lien Bonds. The buy-back will be carried out as a reverse Dutch
auction within 30 days after the closing of the Restructuring.
- Bank
lenders: Reduction of amortisations on all bank facilities for 3.5
years from second half of 2016 to the end of 2019, with a total
positive liquidity effect for the Company of NOK 1.3 billion. All
bank maturities will be extended by 42 months in addition to
amended financial covenants for all facilities.
-
Cancellation of newbuilding: The existing new-building contract
with Vard is to be cancelled. Vard shall as compensation for the
cancellation receive Shares equal to 4 % of the total issued Shares
post the Restructuring (incl. for the avoidance of doubt, the New
Equity, but before the Subsequent Equity Offering).
- The Company
has obtained support from large bondholders in its two bonds, REM04
PRO and REM05. Effectuation of the proposal to the bondholders is
subject to approval by a Bondholder Meeting which will be summoned
soon.
- The
Restructuring will result in a substantial dilution of existing
shareholders not participating in the New Equity, and the
contemplated Subsequent Offering will, if implemented, not fully
compensate the dilutive effect for the remaining shareholders.
Having considered available alternatives, the Board is however of
the opinion that such deviation from the equal treatment principle
will be fair and necessary, given the challenging financial
situation of the Company, the prevailing market conditions, the
agreed terms of the Restructuring and the Company's need for
flexibility when seeking to secure the New Equity.
- All
relevant banks have in-principle agreed to the Restructuring,
subject to relevant credit committee approvals and customary
closing conditions.
- Prior to
completion of the transactions described above, the main
shareholder of Rem Offshore contemplates to restructure its
ownership in Rem Offshore. Further details will be provided in due
course.
The Restructuring is conditional on requisite
approval from all concerned stakeholders as detailed above.
ABG Sundal Collier ASA is acting as financial
advisor to the Company in connection with the Restructuring.
Wikborg, Rein & Co Advokatfirma DA is acting as Norwegian legal
advisor to the Company.
27 June 2016
Fosnavåg, Norge
Board of Directors
Rem Offshore ASA
Questions should be directed to:
Arild Myrvoll, CEO (+47 90 01 41 88)
Ola Beinnes Fosse, CFO (+47 97 53 12 27)
Åge Remøy, Chairman of the Board (+47 90 59 12
92)
This information is subject
to the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: REM Offshore ASA via Globenewswire
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