Denne melding til obligasjonseierne er kun utarbeidet på engelsk. For informasjon vennligst kontakt Nordic Trustee ASA

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Maude Hardy
5 years ago
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1 Denne melding til obligasjonseierne er kun utarbeidet på engelsk. For informasjon vennligst kontakt Nordic Trustee ASA To the bondholders in: ISIN NO FRN I.M. Skaugen SE Senior Unsecured Bond Issue 2012/2015 Oslo, 9 February 2015 SUMMONS TO BONDHOLDERS MEETING Nordic Trustee ASA (previously Norsk Tillitsmann ASA) acts as trustee (the Bond Trustee ) for the bondholders (the Bondholders ) in the above bond issue (the Bonds, the Bond Issue or "IMSK12") with I.M. Skaugen SE as issuer (the Company or the Issuer ). Capitalized terms used herein shall have the meaning assigned to them in the bond agreement (as amended) dated 21 February 2012 (the Bond Agreement ), unless otherwise stated herein. The information in this summons regarding the Issuer and market conditions is provided by the Issuer, and the Bond Trustee expressly disclaims all liability whatsoever related to such information. 1. BACKGROUND The Company s core operating market for petchem/lpg and LNG transport has been challenging since the financial crisis, and operating results and cash flow have been reflective of this. At the same time, the Company is now seeing encouraging signs of improvement. Earnings from vessel operations improved notably through 2014, apart from a short term dip in the fourth quarter of The fourth quarter dip was a result of rapid decline in oil prices and product prices creating a wait and see for product purchases. The positive trend is expected to continue in 2015 on the back of a number of positive factors derived from the US shale oil and gas boom and a lower oil price. The Company is also engaged in concrete and advanced discussions regarding TC-contracts for LNG freight for its LNG capable vessels (6 vessels in total). The IMSK12 Bond Issue is maturing on 27 February 2015, and currently NOK 209 million (approx. USD 27.5 million) is outstanding (net of current Issuer's Bonds). To ensure sufficient working capital going forward, the Issuer is aiming to reduce the direct liquidity impact from the February maturity through a proposal to the Bondholders by (i) extension of the remaining outstanding principal to 30 June 2016 (ii) a part buy back offer of minimum NOK 60 million (equivalent of USD 8 million) of principal amount. The proposal is approved by the Board of Directors of I.M. Skaugen SE. As part of the transaction, the Company has received and accepted an indicative term sheet to roll forward a USD/NOK cross currency swap against security, which will mature at the same time as the extended bond and where Swedbank is the swap counterparty. The cross currency swap is part of the company s portfolio of derivatives securing a constant USD nominal on the bond debt. This part of the transaction will have no liquidity effect nor any material P&L effect and the swap itself and its current underlying negative value will be secured by a 2nd priority lien in two of the Company s owned vessels. In the group profit and loss statement this negative value is offset by gains on the nominal value of the bonds in USD. The Proposal is subject to approval by 1

2 Swedbank s credit committee ahead of the Bondholder s Meeting. For further information on the Company and other updates, please refer to the Company s recent stock exchange announcements and the Company's financial reports, all available on and the Company's web page 2. THE PROPOSAL Based on the foregoing, the Company has approached the Bond Trustee to convene a Bondholders Meeting for the Bonds in order to consider the Company s request to amend the Bond Agreement as follows (the "Proposal"): (i) extension of the maturity date of the Bonds with 16 months, from 27 February 2015 to 30 June 2016 (the Extended M aturity Date ); (ii) interest accrued on the Bonds as per 27 February 2015 shall be paid on 27 February 2015; (iii) (iv) denomination of each Bond shall be changed from NOK 500,000 to NOK 1; and a call option for the Company (the Issuer's Call Option ) shall be introduced, pursuant to which the Company may redeem the remaining Bonds in whole or in part (together with accrued unpaid interest) at any time prior to the Extended Maturity Date at 100% of par value. Settlement of the Issuer's Call Option shall take place within ten Business Days following the date of exercise. The Call Option provision will be included in the Bond Agreement as Clause 10.3 and read as follows: "The Issuer may redeem the Bond Issue in whole or in part as follows (Call Option) at any time up to, but not including, the Extended Maturity Date, at 100 per cent o f par plus accrued interests on redeemed amount. Exercise of the Call Option shall be notified by the Issuer in writing to the Bond Trustee and the Bondholders ten Business Days prior to the settlement date of the Call Option. Partial redemption must be carried out pro rata (in accordance with the procedures of the Securities Depository). On the settlement date o f the Call Option, the Issuer shall pay to each o f the Bondholders holding Bonds to be redeemed, in respect o f each such Bond, the principal amount of such Bond and any unpaid interest accrued up to the settlement date. Bonds redeemed by the Issuer in accordance with this Clause shall be discharged against the Outstanding Bonds." The Proposal shall be conditional upon the Company offering to redeem Bonds (the Buy-Back ) with an aggregate principal amount (not including current Issuer's Bonds) of the minimum NOK 60 million (equivalent of USD 8 million) (the Buy-Back Amount ), such Buy-Back intended to be structured as an offer to buy back Bonds through a "reverse Dutch auction" (and subsequent cancellation of Bonds acquired). The Buy-Back and auction will be announced through a stock exchange notice and to Bondholders via VPS and on Stamdata within 10 Business Days after the Bondholders' Meeting approving the Proposal and is expected to be carried out on the following main terms and principles: All Bondholders (subject to legal constraints, if any) will through the announcement be invited and be eligible to provide offers for sale of all or a portion of their Bonds. The auction period will be no less than one and no more than three Business Days. The Buy-Back will be conducted as a "reverse Dutch auction", where the Company, through the Advisors (as defined below), will receive offers for sale from the Bondholders and the purchase price determined through a reverse bookbuilding (i.e. lowest price offers

3 first accepted). Maximum purchase price is 100% of par value ( Par Value ). Should the offers received exceed the Buy-Back Amount, offers will be accepted as follows: o First, according to price (i.e. the Buy-Back may be completed at different prices); and o Second, if offers at the last price accepted in the auction exceed the remaining Buy-Back Amount, the offers at this price level shall be accepted pro-rata based on offer size. In case the Buy-Back is completed at any discount to Par Value, the nominal difference between the discounted purchase prices and Par Value shall be distributed as cash to the remaining Bondholders of IMSK12 after the settlement of the Buy-Back. Such cash to be distributed to the remaining Bondholders on a pro rata basis no later than 10 Business Days after the Buy-Back has been settled. The Bond Trustee shall be authorised to document the Proposal by way of addendums or amendment agreements to the Bond Agreements or otherwise. Other than any amendments prompted by the Proposal, the terms and conditions of the Bond Agreements will remain unchanged and continue to apply in their existing form. 3. CONSENT FEE As compensation to the Bondholders, the Issuer offers the Bondholders a one-time amendment fee of 2.0% (flat) of the face value of the respective Bondholders holdings of the Bonds (the Fee ). The Fee will be payable to the Bondholders (with record date at end-of-business the date of the Bondholders Meeting), within 10 Business Days after the Bondholders Meeting, provided that the Bondholders Meeting adopts the proposed changes as set out in Clause 2 of this summons. 4. FURTHER INFORMATION The Issuer has engaged Feamley Securities AS and Swedbank Norway as its financial advisors (the Advisors ) with respect to the Proposal. Accordingly, Bondholders may contact the Advisors for further information: Fearnley Securities AS: Nils Ansgar Skogstad, tel: , cell: , na.skogstad@fearnleys.no Per Lauvvang, tel: , cell: , p.lauvvang@feamlevs.no Swedbank Nor-way: Anders Hakonsen, tel: , cell: , anders.hakonsen@swedbank.no Wilhelm Koren, tel: , cell: , wilhelm.koren@swedbank.no The Advisors act solely for the Issuer and no-one else in connection herewith. No due diligence investigations have been carried out by the Advisors with respect to the Issuer, and the Advisors expressly disclaim any and all liability whatsoever in connection with the Proposal (including but not limited to the information contained herein). For further questions to the Bond Trustee, please contact Vivian Trosch at mail@nordictrustee.com or

4 5. EVALUATION AND NON-RELIANCE The Proposal is put forward to the Bondholders without further evaluation or recommendations from the Bond Trustee. Nothing herein shall constitute a recommendation to the Bondholders by the Bond Trustee. The Bondholders must independently evaluate whether the Proposal is acceptable and vote accordingly. The Company has informed the Bond Trustee that Bondholders representing a majority of the Bond Issue have undertaken to vote in favour of the Proposal. 6. SUMMONS FOR BONDHOLDERS MEETINGS The Bondholders are hereby summoned to Bondholders Meetings in the respective Bond Issues: Time: Place: 23 February 2015 at 09:00 hours (Oslo time) The premises of Nordic Trustee ASA, Haakon VHs gt 1, 0161 Oslo - 6th floor 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 the Proposal: It is proposed that the Bondholders Meeting for the Bond Issue resolves the following: The Bondholders' Meeting approves the Proposal as described in section 2 o f the summons for the Bondholders Meeting. The Bond Trustee is authorized to complete the negotiation of form, terms, conditions and timing in relation to the Proposal. The Bond Trustee is further authorized to enter into the necessary agreements in connection with documenting the decisions made by the Bondholders Meetings as well as to carry out the necessary completion work, including making appropriate amendments to the Bond Agreement and enter into an addendum agreement to the Bond Agreement and agree to minor adjustments to the Proposal not being material to the Bondholders' interest. The changes to the Bond Agreement shall be conditional on the Buy-Back." To approve the Proposal, Bondholders representing more than two-thirds of the Voting Bonds represented (in person or by proxy) at the Bondholders' Meeting must vote in favour of the Proposal. In order to have a quorum at least /2 of the Voting Bonds must be represented at the meeting. Please find attached a Bondholder s Form from the Securities Depository (VPS) as Schedule A hereto, 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 serves 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.com, , or Nordic Trustee ASA, PO Box 1470 Vika, 0116 Oslo, Norway). 4

In the event that Bonds have been transferred to a new owner after the Bondholder s Form was made, the new

Bond Trustee accepts as sufficient proof of the ownership of the Bonds.

other than to Nordic Trustee, to notify Nordic Trustee by telephone or by e- mail (at set out at the first page of

5 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 Nordic Trustee, to notify Nordic 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. Yours sincerely Vivian Trøsch Enclosed: Schedule A - Bondholder s Form 5

Denne melding til obligasjonseierne er kun utarbeidet på engelsk. For informasjon vennligst kontakt Nordic Trnstee ASA

Denne melding til obligasjonseierne er kun utarbeidet på engelsk. For informasjon vennligst kontakt Nordic Trnstee ASA To the bondholders in: ISIN NO 001 064167.3 - FRN I.M. Skaugen SE Senior Unsecured