The Oslo, Norway-listed owner of accommodation rigs gained approval from banks and other creditors to reduce its debt mountain
Lenders have agreed Prosafe can turn debt into equity, resulting in lenders owning the vast majority of company shares. This cuts Prosafe’s debts, which totalled US$1.44Bn, by at least 75%, significantly deleveraging the balance sheet, reducing annual debt payments and improving financial flexibility.
“The support for a comprehensive restructuring from our lenders is a key milestone in the process to implement a sustainable financial solution,” said Prosafe chief executive Jesper Andresen. “We are pleased to have achieved this consensually among our lenders. It reflects the strong support we have enjoyed from them throughout the process, which has enabled us to continue our business as usual and protect and generate value.”
So far, Prosafe has gained credit approval from around 79% across the US$1.3Bn facility and the US$144M facility, with additional credit approvals expected by mid-June.
US$1.1Bn of total debt will turned into equity. Of the US$1.3Bn debt, US$1Bn will be exchanged for 89% of equity, US$38M will be paid in cash, leaving US$250M of debt, maturing in December 2025 and with interest rates of 2.5%.
Of the US$144M of debt, US$37M will be turned into 3% equity and US$93M will be reinstated debt, maturing in December 2025 and US$9M will be paid in cash.
Equitisation of US$1.1Bn of debt reduction across Prosafe’s bank facilities (the amount subject to timing of closing and accrued interest to that date), along with outstanding interest rate swaps, other financial and contingent liabilities results in 99% of Prosafe SE equity.
If Prosafe does not receive unanimous support for the restructuring from all stakeholders, it intends to implement the transaction using a Singapore Scheme of Arrangement combined with other arrangements if required, Mr Andresen explained.
“Prosafe will continue to position the company and focus on protecting and creating value for all its stakeholders,” he said.
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