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Prosafe is pleased to announce that it has received support from lenders of
Prosafe SE and Prosafe Rigs Pte. Ltd. on a comprehensive and material
restructuring of the financial indebtedness of the group (the “Transaction”).
The Company has received acknowledgment of credit approval (subject to certain
conditions) in support of the Transaction from ca. 79% across the USD 1300
million facility and the USD 144 million facility with additional credit
approvals expected by mid-June 2021.
The terms of the Transaction will result in significant de-leveraging of the
balance sheet with ca. 75% debt reduction, corresponding reduction in annual
debt service, a sufficient cash balance and in sum a significantly improved
balance sheet and improved financial flexibility.
Highlights of the proposed financial restructuring:
- Significant de-leveraging: ca. USD 1,100 million of total debt reduction
(amount subject to timing of closing and accrued interest to that date).
Reinstatement under the USD 1,300 million facility and the USD 144 million
facility of USD 250 million and USD 93 million, respectively.
- Significant runway: No mandatory debt maturities until December 2025.
- Reduced interest costs: ca. USD 9 million in annual debt servicing costs
post-transaction.
- Financial flexibility: no fixed amortisation on the reinstated debt
facilities. All principal repayments prior to maturity occurring via a new
group cash sweep mechanism.
- Liquidity headroom: Sufficient liquidity well in excess of agreed minimum
cash covenant.
- Equitisation: ca. USD 1,100 million of debt reduction across the Company’s
bank facilities (amount subject to timing of closing and accrued interest to
that date), outstanding interest rate swaps, other financial liabilities and
contingent liabilities to be equitized at closing into 99% of Prosafe SE
equity.
- Implementation: to the extent Prosafe does not receive unanimous support for
the restructuring from all stakeholders, the Company intends to implement
the Transaction using a Singapore Scheme of Arrangement combined with other
arrangements if required. The Transaction will also require approval from
the Company’s shareholders in an extraordinary general meeting. Notice of
such meeting will be issued in due course.
Jesper K. Andresen, Prosafe’s CEO says, “The support for a comprehensive
restructuring from our lenders is a key milestone in the process to implement a
sustainable financial solution. We are pleased to have achieved this
consensually among our lenders which reflects the strong support we have enjoyed
from them throughout the process and which has enabled us to continue our
business as usual and protect and generate value. Pending remaining credit
approvals and a possible Singapore Scheme of Arrangement combined with other
arrangements to complete the implementation, Prosafe will continue to position
the company and focus on protecting and creating value for all its
stakeholders”.
Detailed terms for the restructuring:
Amended and Restated USD 1,300 million facility
- Cash: USD 38 million subject to registered security interests/set-off rights
to be utilized as cash repayment at par at completion
- Debt reinstatement: USD 250 million
- Maturity: December 2025
- Interest rate: L+2.50% payable in cash
- Equitisation: remaining balance of ca. USD 1,000 million to be equitised in
exchange for ca. 89% of equity (assuming full equitisation of USD 45 million
Westcon Tranche)
Amended and Restated USD 144 million facility
- Cash: USD 9 million cash subject to registered security interests/set-off
rights to be utilized as repayment at par at completion
- Debt reinstatement: USD 93 million
- Maturity: December 2025
- Interest rate: L+2.50% payable in cash
- Equitisation: remaining balance of USD 37 million to be equitised in
exchange for ca. 3% of equity
Interest Rate Swap Liabilities
- To be fully equitised in exchange for ca. 2% of equity
Cosco Seller’s Credit for the Safe Notos
- Unless a consensual agreement is made with Cosco ca. USD 20 million to be
fully equitised in exchange for ca. 2% of equity
Westcon Tranche and Westcon Claim
- A Westcon Tranche of USD 45 million (contingent liability) is included in
the agreement with lenders. The Company shall make cash payments on the
Westcon Tranche only to the extent it receives any proceeds from the Westcon
Court case while any remaining portion would be fully equitized. If the
judgement in the Gulating Court of Appeal in favour of Westcon (the “Westcon
Claim”) becomes final pending the decision by the Supreme Court, the Westcon
Tranche is likely to be equitized in favour of the lenders in the USD 1300
million facility
- NOK 245 million of the Westcon Claim is secured by a bank guarantee and will
be covered from cash in the company following a final binding judgement in
favour of Westcon up to this amount.
- Any unsecured portion of the Westcon Claim over and above the NOK 245
million guaranteed amount provided to Westcon to be equitized in exchange
for ca. 3% equity (estimate)
Cosco Seller’s Credit for the Safe Eurus
- No changes to the terms of the Eurus Promissory Note as restructuring does
not include the borrowing entity
Convertible Bonds and Existing Shareholders
- Convertible Bonds shall be converted into shares
- Convertible Bond holders and existing shareholders together will hold 1% of
equity
Implementation
- Reference is further made to the Company’s updates, latest on 27 May 2021,
regarding the moratorium protection in Singapore as part of the ongoing
financial process to facilitate protection of going concern value pending
finalization of term sheet negotiations with its major creditors and,
thereafter, implementation of the agreed solution. Prosafe’s objective is to
continue business as normal during this final phase of discussions and the
implementation process. To the extent that a fully consensual solution is
not achievable, the intention is to implement a solution using a Singapore
Scheme of Arrangement combined with other arrangements, to the extent
required.
The Company will make the appropriate announcements as and when there are
further developments on implementation of the Transaction. Please monitor
Prosafe SE’s website for any announcements or updates on the process.
Moelis & Company are acting as financial advisors, and Schjødt and Clifford
Chance are acting as legal advisors to Prosafe in connection with the
restructuring.
Prosafe is a leading owner and operator of semi-submersible accommodation
vessels. The company is listed on the Oslo Stock Exchange with ticker code PRS.
For more information, please refer to www.prosafe.com (http://www.prosafe.com).
Stavanger, 4 June 2021
Prosafe SE
For further information, please contact:
Jesper K. Andresen, CEO
Phone: +47 51 65 24 30 / +47 907 65 155
Stig Harry Christiansen, Deputy CEO and CFO
Phone: +47 51 64 25 17 / +47 478 07 813
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to Section 5-12 the Norwegian Securities Trading Act.
This stock exchange announcement was published by Cecilie Helland Ouff Senior
Manager Corporate Finance and Treasury at Prosafe on 4 June 2021 at 08:00 CEST.
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