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SeaBird secures consents for restructuring but needs new equity

Tue 01 Aug 2017 by David Foxwell

SeaBird secures consents for restructuring but needs new equity
SeaBird’s next hurdle is securing more working capital

Seismic survey company SeaBird Exploration Plc has secured all consents required for a comprehensive restructuring first announced 26 May 2017 but still needs to find working capital.

The company has signed an agreement with Glander after which US$1,911,896 of the principal amount and all accrued interest as of 3 June 2017 owed to Glander under the Glander credit facility will be repaid and discharged upon the issuance of SeaBird shares to Glander at Nkr5 (US$0.6) per share. The remaining claim of Glander under the Glander credit facility of US$440,591 will be amended with the maturity date extended until 30 June 2020, no principal payments until 30 June 2020 and the introduction of payment-in-kind interest for all interest payments to be made under the Glander credit facility.

Furthermore, the company has entered into an exchange agreement and a confirmation with TGS that all SBX04 Bonds outstanding under Tranche A shall be transferred to the company and that any interest on such SBX04 Bonds shall be irrevocably discharged in exchange for the transfer of title to the majority of the company's multi-client library assets to TGS, and confirmation that the company has cancelled all SBX04 Bonds under Tranche A.

The company has also entered into an addendum to a charter contract for the vessel Munin pursuant to which the charter period for Munin will be extended to 30 June 2020, the charter hire will be reduced to US$2,088 per day from 3 June 2017 until 30 June 2020 and where the new charter hire can, at the company's discretion, be accumulated and not paid in cash before 30 June 2020.

As a consequence of the above, all consents for the restructuring have now been obtained, and the company will proceed with the conversion into equity of the SBX04 Tranche B, the Glander claim and the Munin claim as approved by the SBX04 bondholders in the bondholder meeting on 2 June 2017 and the SBX shareholders in the EGM on 13 June 2017. The company will complete the restructuring and issue the new shares as soon as practically possible. The record date for the changes to the SBX04 Bonds is expected to be around 3 August 2017. 

The company will, as a consequence of the restructuring, reduce its debt and lease burden by approximately US$37.5M, have US$5.7M in outstanding financial debt and have no significant debt maturities until 30 June 2020.

However, as stated in the company's Q1 2017 financial report, SeaBird requires additional funding for working capital purposes and continues to try to obtain new equity financing. It is in active dialogue with potential capital sources.

Any equity transaction will require the increase of authorised share capital and the company will call a new EGM on or about 16 August with the aim of obtaining the shareholders’ approval for such equity issue. Any issue of further equity capital is likely to result in substantial dilution to existing shareholders.

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