SUMMONS TO BONDHOLDERS MEETING

Transcription

1 Denne melding til obligasjonseierne er kun utarbeidet på engelsk. For informasjon på norsk vennligst kontakt Nordic Trustee AS To the bondholders in the 9 per cent Noram Drilling Company AS (formerly Global Rig Company AS) Senior Secured Callable Bond Issue 2014/2019 (ISIN NO ) Oslo, 24 October 2018 SUMMONS TO BONDHOLDERS MEETING Nordic Trustee AS (the "Bond Trustee") acts as trustee for the bondholders of the bonds (the "Bonds") in the above-mentioned bond issue (the "Bond Issue") where Noram Drilling Company AS (formerly Global Rig Company AS) (the "Issuer", and together with its subsidiaries, the "Group") is the issuer. All capitalized terms used herein shall have the meaning assigned to them in the bond agreement originally dated 3 June 2014 (as amended and restated on 30 October 2015, the "Bond Agreement") and made between the Bond Trustee and the Issuer, unless otherwise stated herein. The information in this summons regarding the Issuer and market conditions are provided by the Issuer, and the Bond Trustee expressly disclaims all liability whatsoever related to such information. 1 BACKGROUND The Issuer has currently nine land based oil and gas rigs in operation spread across the southwestern United States (together, the "Rigs" (as such term is defined in the Bond Agreement)). The Rigs are currently owned by NorAm Drilling Company, a wholly owned subsidiary of the Issuer, (the "New Rig Owner" (as such term is defined in the Bond Agreement)). The Group is planning to acquire two additional land rigs (the "Additional Rigs"), with the New Rig Owner as the buyer. The issuer will raise additional equity in an amount of NOK 200,000,000 for the purpose of part financing the acquisition and upgrades of the Additional Rigs (the "Equity Issue"). The further growth to the Group's fleet by the contemplated acquisition of the Additional Rigs is considered to have a positive impact on the future revenue and cashflow of the Group. In order to cater for the contemplated transaction structure for the acquisition of the Additional Rigs and ensure the visibility of Group's financing, the Issuer proposes that certain amendments are made to the Bond Agreement. Page 1 of 6

2 2 AMENDMENTS TO THE BOND AGREEMENT On the basis of the background information set out above, and subject to the conditions set out in section 2.6 below, the Issuer proposes to make the following changes to the Bond Agreement (sections 2.1 to 2.5 below are hereinafter referred to as the "Bond Amendments"): 2.1 Maturity and amortization The Maturity Date shall be extended by two years, and the new Maturity Date shall be 3 June From and including the Effective Date (as defined below), the Issuer shall pay semi-annual instalments of USD 5,000,000 on each Interest Payment Date, the first instalment to be due and payable on 3 December Instalments will be paid on a pro rata basis in accordance with the procedures of the Central Securities Depositary (VPS). On the Maturity Date in June 2021, all remaining Outstanding Bonds will be due and payable. 2.2 Call Option From and including the Effective Date (as defined below), paragraph of Clause 10.2 (Call Option) shall be amended to read: The Issuer may redeem the Bond Issue (in whole or in part of no less than USD 10,000,000 on a pro rata basis) at any time from and including (Call Option): (i) (ii) (Hi) the Effective Date to, but not including, 3 June 2020 at a price equal to 101.0% o f par value (plus accrued interest on redeemed amount); 3 June 2020 to, but not including, 3 December 2020 at a price equal to 100.5% of par value (plus accrued interest on redeemed amount); and 3 December 2020 to, but not including, the Maturity Date at a price equal to 100.0% of par value (plus accrued interest on redeemed amount). 2.3 Financial covenants The following amendments shall be made to the financial covenants in Clause 13.7 (Financial covenants)'. Paragraph (Equity Ratio) of Clause 13.7 (Financial covenants) shall be deleted and replaced by the following: The Issuer shall ensure that the Group maintains an Equity Ratio of (i) from the Effective Date to 31 December 2019 (both dates inclusive), minimum 30% and (ii) thereafter, minimum 35%. Page 2 of 6

3 Paragraph (Liquidity) of Clause 13.7 (.Financial covenants) shall be deleted and replaced by the following: The Issuer shall ensure that the Group maintains a minimum Liquidity of (i) from the Effective Date to 31 December 2019 (both dates inclusive), USD 5,000,000 and (ii) thereafter, USD 10,000, Additional Rigs The Additional Rigs shall be defined in the Bond Agreement, and the Bond Agreement shall include the following terms in respect of the Additional Rigs: (c) (d) To the extent the New Rig Owner is the owner of the Additional Rigs, the provisions in Clause 13.5 (Additional covenants regarding the New Rig Owner) shall extend to the Additional Rigs in addition to the Rigs. However, the said provisions shall not impose any restrictions on a sale or other disposal of the Additional Rigs. The Additional Rigs shall not be subject to the rig covenants set out in Clause 13.6 (Rig Covenants) and not be included in the Rig Security. The Issuer shall be permitted to incur additional Financial Indebtedness against Security over the Additional Rigs (the "Additional Rig Debt"), subject to compliance with the financial covenants in Clause 13.7 (Financial covenants) immediately following incurrence of the Additional Rig Debt, as evidenced by a compliance certificate delivered to the Bond Trustee including pro forma calculations which includes the Additional Rig Debt on an as incurred basis, and where the Additional Rigs shall be included in the Market Value of the Rigs and the Additional Rig Debt shall be added to the Outstanding Bonds for the purpose of calculating the Asset Coverage Ratio. The right to incur Additional Rig Debt shall be added to the definition of "Permitted Financial Indebtedness" in the Bond Agreement. The Additional Rigs shall be included in the "Market Value of the Rigs" provided that no Additional Rig Debt has been incurred and remains outstanding. 2.5 Annual Market Value of the Rigs The Issuer proposes that after the Effective Date the determination of the market value of the Rigs is made on an annual basis rather than on a semi-annual basis. Consequently the Issuer proposes that the last sentence of the definition of "Market Value of the Rigs" in Clause 1.1 (Definitions) shall be deleted and replaced by the following: The valuation shall be made at least annually on 30 June each year, or following an Event of Default (as defined above), upon the request o f the Bond Trustee. 2.6 Conditions and Effective Date The Bond Amendments shall be subject to satisfaction of the following conditions: (i) completion of the Equity Issue; and Page 3 of 6

4 (ii) customary conditions precedent and documentation satisfactoiy to the Bond Trustee. The Bond Amendments shall be effective from and including the date the conditions in above have been satisfied (the "Effective Date"). 3 PROPOSAL The Issuer has informed the Bond Trustee that it has discussed the proposed Bond Amendments with certain of the larger Bondholders, and Bondholders holding in aggregate more than 2/3 of the Bonds have undertaken that they will vote in favour of the proposal. In accordance with the terms of the Bond Agreement, the Issuer has approached the Bond Trustee and requested that a Bondholders' Meeting be held to consider and resolve the following (the "Proposal"): The Bondholders: approve and authorize the Bond Amendments; instruct the Bond Trustee (in consultation with its advisors) to take such steps on behalf of the Bondholders as may be necessary or desirable in connection with the implementation of the Bond Amendments, including, without limitation: (i) (ii) negotiating and approving the final terms of, and entering into, an amendment agreement to the Bond Agreement and related documentation, as may be necessary in relation to the Bond Amendments; and take any and all other steps and actions expressly or impliedly required to be taken or that would be desirable to take in order to implement and complete the Bond Amendments, including, without limitation, negotiation, documenting and entering into legal agreements, granting amendments and waivers and giving instructions, consents, approvals and directions; and (c) agree that the Bond Amendments shall be effective from and including the Effective Date. 4 AMENDMENT FEE As a compensation to the Bondholders for approving the Proposal, the Issuer offers the Bondholders a one-time amendment fee of USD 1,000,000, payable to the Bondholders within ten (10) Business Days of the Effective Date (with pro rata allocation between the Bondholders and record date two days prior to the payment date), provided that the Bondholders accept the Proposal. Page 4 of 6

5 5 SUMMON FOR BONDHOLDERS' MEETING Bondholders are hereby summoned to a Bondholders' Meeting: Time: Place: 7 November 2018 at 13:00 hours (Oslo time) The premises of Nordic Trustee AS, Haakon VHs gate 1, 0161 Oslo - 5thfloor Agenda: 1. Approval of the summons. 2. Approval of the agenda. 3. Election of two persons to co-sign the minutes together with the chairman. 4. Request for adoption of proposal: It is proposed that the Bondholders' Meetings resolves the following: "The Bondholders' Meeting approves the Proposal as described in section 3 in the summons to this Bondholders' Meeting." To approve the above resolution, Bondholders representing more than 2/3 of the Bonds represented in person or by proxy at the Bondholders' Meeting must vote in favour of the resolution. In order to have a quorum, at least half (1/2) of the voting Bonds must be represented at the meeting. If the Proposal is not approved by the Bondholders, the Bond Agreement will be in full force and effect. Please find attached a Bondholder's Form from the Securities Depository (VPS), indicating your bondholding at the printing date. The Bondholder's Form will serve as proof of ownership of the Bonds and of the voting rights at the Bondholders' Meeting. (If the bonds are held in custody - i.e. the owner is not registered directly in the VPS - the custodian must confirm: (i) the owner of the bonds, (ii) the aggregate nominal amount of the bonds and (iii) the account number in VPS on which the bonds are registered.) The individual Bondholder may authorise the Bond Trustee to vote on its behalf, in which case the Bondholder's Form also selves as a proxy. A duly signed Bondholder's Form, authorising the Bond Trustee to vote, must then be returned to the Bond Trustee in due time before the meeting is scheduled (by scanned , telefax or post to mail@nordictrustee.no, , or Nordic Trustee AS, PO Box 1470 Vika, 0116 Oslo, Norway). In the event that Bonds have been transferred to a new owner after the Bondholder's Form was made, the new Bondholder must bring to the Bondholders' Meeting or enclose with the proxy, as the case may be, evidence which the Bond Trustee accepts as sufficient proof of the ownership of the Bonds. For practical purposes, we request those who intend to attend the Bondholders' Meeting, either in person or by proxy other than to the Bond Trustee, to notify the Bond Trustee by telephone or by e- mail (at set out at the first page of this letter) within 16:00 hours (4 pm) (Oslo time) the Business Day before the meeting takes place. Page 5 of 6

6 Yours sincerely, Nordic Trustee AS Enclosed: Appendix 1: Bondholder's Form Page 6 of 6