Board of Directors working on a restructuring plan
Board of Directors working on a restructuring plan to attract USD 104 million of new equity to support an employment opportunity for Nexus #1.
Reference is made to announcement of 7 April 2009.
The previously announced LOU with Premier Oil is in the opinion of the Company regarded as the only realistic opportunity to secure employment for Nexus #1 prior to delivery from the yard. The Board of Directors is of the opinion that not pursuing this opportunity will result in significant risk of a costly lay-up period as it does not see alternative employment in the foreseeable future. Nexus #1 will be delivered at the end of the second quarter in 2009 in a generic mode according to the contract with Samsung.
The contract with Premier Oil requires additional capital expenditure of approximately USD 160 million to cover field specific investments.
In addition, the Company will have to fund working capital, finance costs and operating costs up to first oil, which is expected September 2010.
The contract with Premier Oil is for 6 years (with three option periods of one year) will generate approximately of USD 64 - 67 million of annual EBITDA to Nexus and will be performed through a bareboat charter structure with BWO. BWO will be responsible for and deliver the field specific investment on a turn key EPC basis.
A significant restructuring of the Company is required in order to attract new capital and for DVB Bank and GIEK/Eksportfinans to increase their existing lending commitments. The current equity will be substantially diluted, but will together with bondholders be offered to participate in the new equity
The restructuring plan is subject to bondholder approval, satisfactory bank financing and increase of present bank facility from USD 320 mill to USD 400 mill, final signing of the contract with Premier Oil, approval by Nexus Board and General Assembly and approval by the Board of Directors of BW Offshore Limited. A successful restructuring will result in Nexus #1 being fully financed to first oil on the Premier Oil contract. BWO will guarantee an equity offering of USD 104, subject to its board approval and other elements in the restructuring plan falling in place.
The Company will start negotiating with bondholders to find a satisfactory restructuring of the bond debt, which may include write off and conversion of bond loans into equity. Subsequently, as soon as possible and deemed appropriate by the Company, summons to bondholder meetings will be sent out.
For further information, please contact:
Anders Holm, CEO
aho@nexusfp.no +47 90 60 50 72
Arild Bårdsen, CFO
aba@nexusfp.no
+47 92 66 75 90