Sevan Marine ASA (SEVAN), the Norwegian maker of floating oil-production and storage vessels that’s fighting to stave off bankruptcy, entered into a $36.1 million bond loan agreement and expressed optimism it can overcome its “financial challenges” by the end of September.
Sevan, which earlier this month proposed deferring debt interest payments, reached the agreement with Norsk Tillitsmann ASA, acting on behalf of a group of the company’s bondholders, according to a statement today.
The company failed to complete a rights offer in May that would have helped fund maintenance costs at its cylindrical floating production and storage vessels, which the company expects to reach as much as $170 million, compared with the $135 million previously forecast. Sevan Marine has said it will seek to raise at least $200 million in a share sale and rights offer.
“The company will continue its constructive dialogue with bondholders and other relevant parties regarding a long-term restructuring solution,” Arendal, Norway-based Sevan said in the statement. “The company is optimistic that a long-term solution to the current financial challenges can be obtained by the end of September.”
Sevan Marine surged 56 percent to 0.72 krone as of 9:04 a.m. in Oslo, valuing the company at 373 million kroner ($68 million). The shares have lost 89 percent this year.
The bonds will be issued at 97 percent of par value and carry a coupon of 15 percent a year, the company said. The loan will mature in July 2012 and the redemption price will be 107.5 percent of par value during the first six months following the issue date, and 103.75 percent after that.
The bonds are subject to mandatory redemption upon the successful completion of a long-term restructuring solution, which requires that Sevan raises $175 million or more in new capital.
At least $30 million of the loan agreement reached today will be used to upgrade the Sevan Voyageur production vessel. The company is in discussion with its banks and commercial partners on the Sevan Voyageur project for additional liquidity support, it said.
Premier Oil Plc (PMO) last month said that partners in the U.K. Huntington oil field may have to lend $40 million to Sevan to allow deployment of Sevan Voyageur. Premier, Norwegian Energy Co. ASA and EON AG have a lease agreement with Sevan Marine for the floating production, storage and offloading vessel, to start pumping Huntington’s first oil by April 2012.
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