By reaching an agreement with holders of the NOK 750 million bond loan (ISIN NO 0010369689), Aker BioMarine has moved one step further in the refinancing program the company announced on 8 February 2010. Pursuant to the new bondholders’ agreement, the face value of the outstanding loan will be reduced to NOK 305 million and the maturity date will be extended to May 2013. The loan’s interest rate will increase 0.25 percentage points to NIBOR + 3.75 percentage points. Further, certain terms and conditions of the current loan agreement will be removed or simplified, and Aker BioMarine has the right to redeem the bond loan at par value at any time it so chooses.
The solution was negotiated in close dialogue with Aker and Norsk Tillitsmann (Norwegian Trustee), which has recommended acceptance of the proposal to bondholders. Aker BioMarine has received written acceptance of the solution from bondholders that together constitute a qualified majority of a bondholders’ meeting.
Bondholders have made these modifications contingent upon Aker ASA issuing a guarantee for the remaining NOK 305 million of the bond loan. A draft agreement has been prepared setting out the terms and conditions for such a guarantee by Aker. The agreement will be presented for approval to the 8 April 2010 annual shareholders’ meeting of Aker BioMarine. The agreement is also subject to final approval by Aker ASA. As compensation for Aker ASA’s guarantee, Aker BioMarine will pay an annual guarantee premium to Aker of five percent, bringing Aker BioMarine’s total financing cost to NIBOR + 8.75 percentage points. However, the 5.0 percent guarantee premium will accrue and only fall due for payment after the bond loan is redeemed, no later than May 2013.
Among the conditions required by Aker ASA for issuing such a guarantee is that the refinancing plan is implemented as announced on 8 February 2010. Key features are that the liabilities and receivables between Aker BioMarine and Aker’s subsidiaries are offset. Further, an Aker BioMarine share issue is to be carried out in which Aker is allowed to convert its remaining net receivables from Aker BioMarine to equity. Also, the company’s non-Aker shareholders will be entitled to subscribe to shares in the issue that allow them to retain their proportionate ownership interest in the company. The aforementioned Aker net receivables that will be converted to Aker BioMarine shares amount to NOK 488 million.
The share issue will be presented to Aker BioMarine’s annual shareholders’ meeting for approval. Aker BioMarine’s Board of Directors will present details as to the share issues’ terms and conditions as part of the notice to shareholders of Aker BioMarine’s annual meeting.
Following consultations with the company’s financial advisors, Arctic Securities, the Board expects to propose a total issue amount of no less than NOK 586 million and no more than NOK 638 million, of which the cash component will amount to no less than NOK 98 million and no more than NOK 150 million; the per-share issue price should be NOK 1. It is a condition for the completion of the overall solution, including the share issue, that the aforementioned minimum amount is subscribed in the share issue. Tradable subscription rights will be granted and all shareholders will have the possibility to maintain their proportionate ownership shares in the company by participating in the issue.
“Through constructive dialogue with our bondholders and Aker, we have reached a solution regarding Aker BioMarine’s bond loan. We are optimistic about our refinancing plan and confident that the final puzzle piece will also fall into place,” says Aker BioMarine President and CEO Hallvard Muri.
“Upon completion of the proposed solution, the company will slash its gross interest-bearing debt from approximately NOK 1.4 billion to NOK 400 million,” says Aker BioMarine’s CFO Fredrik D. Nygaard. “If the share issue is completed at the minimum amount, net interest-bearing debt after the issue will be on the order of NOK 300 million. Although working capital requirements will raise net debt somewhat as we go ahead, we believe the company will have obtained a solid balance sheet in a transparent manner that will support our planned earnings growth.”
Aker BioMarine’s Board of Directors plans to present the proposed share issue and agreements discussed above to the company’s annual shareholders’ meeting. Aker BioMarine will release further details concerning the terms and conditions of the share issue and the schedule for its execution at a later date.
