PGS Wins Bank Support as Billionaire Andresens Boost Investmentby
Petroleum Geo-Services ASA won conditional agreement from banks for a longer credit line and new investment from the billionaire Andresen family, as the Norwegian oil-services provider contends with the crude slump.
Lenders will prolong a revolving credit facility by two years until September 2020, if the company raises 1.9 billion kroner ($223 million) in a private share sale and completes a bond exchange, according to a statement on Tuesday. The Andresen family has agreed to invest 425 million kroner in the stock sale through Ferd AS, PGS’s largest shareholder.
PGS may also sell 300 million kroner of shares in a rights offer as crude prices below $50 a barrel weigh on offshore drilling and demand for surveys. Competitor CGG SA told investors this month that is considering plans to restructure debt.
Under PGS’s bond exchange, holders of the company’s December 2018 notes can get repaid at 95 percent of face value for half their holdings. The other half will be replaced with December 2020 notes paying an identical 7.375 percent coupon. The $450 million of 2018 notes are quoted at about 85 cents on the dollar, according to data compiled by Bloomberg. The exchange offer requires 90 percent acceptance.
PGS’s lenders will gradually reduce the size of the credit facility to $350 million from $500 million, if the company’s plan goes ahead. The surveyor’s earnings before interest, taxes, depreciation and amortization fell almost 40 percent in the 12 months ended September to $382 million, according to data compiled by Bloomberg.