Songa Offshore SE Announces comprehensive refinancing

Songa Offshore SE (“Songa Offshore” or the “Company”) intends to issue a subordinated convertible bond of USD 100m with an option to upsize to USD 125m (the “New Convertible Bond”) and complete a subsequent equity offering of up to USD 25m at NOK 0.15 per share (the “New Equity”), both as part of a comprehensive refinancing. The proposed refinancing further includes a full conversion to equity of SONG06 (the “Existing Convertible Bond”) in an amount of USD 150 million at NOK 0.176 per share, significant interest reductions, maturity extensions and other amendments to SONG04, SONG05 and the Perestroika shareholder loan, as well as amendments to the Company’s secured debt facilities (collectively the “Refinancing”).
The New Convertible Bond is partly underwritten by way of a USD 91.5m bridge financing (the “Bridge Bond”), which has been subscribed for in full by the largest stakeholders in the Company. The Refinancing is supported by qualified majorities across all three bond series.
songaThe Bridge Bond will immediately add needed liquidity and safeguard the operations of the Company and the delivery of Songa Enabler, the Company’s final Cat D newbuild. A liquidity shortfall, cured by the Bridge Bond and the subsequent Refinancing, has arisen mainly due to the negative impact of the lower than anticipated initial utilisation of Songa Equinox and Songa Endurance, delayed rig deliveries, as well as cash deposit requirements in the bank financing related to Songa Encourage and Songa Enabler, as described in the Company’s report for Q4 2015.
Songa Equinox and Songa Endurance both operated with an earnings efficiency of 98% for the last three weeks. Songa Encourage is expected to arrive in Bergen 15 March 2016 and commence drilling operations in April 2016. The delivery of Songa Enabler is expected to take place end of March and the rig is scheduled to commence drilling operations in August 2016.
The Refinancing will secure the commencement of all four long term Cat D drilling contracts for Statoil and create a sustainable long term financial platform for the Company. The four drilling contracts provide for ample debt amortisation capacity and will uniquely position Songa Offshore relative to other drilling contractors through the current market downturn.
Source: Songa Offshore SE
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