ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) refers to the Company’s press release on May 21, 2024, and announces that the Company has today issued a summons for written resolution to all bondholders in the outstanding 12% senior unsecured bond due July 2025 (ISIN NO 0011057622) (the “Bond”). The summons proposes amendments to the Bond (the “Proposal”), including a two-year extension to July 2027.
The Company has met with and received strong support for the Proposal from a large percentage of the bondholders. Approval of the Proposal will enable the Company to better utilize all available cash flow, above a prudent balance required to run the business, in order to repay the Bond in an accelerated fashion versus the current structure.
Elvis Pellumbi, Chief Financial Officer of ShaMaran, commented, “Launching the bond proposal today is an important step in allowing the Company to accelerate our debt repayment efforts and enhance value for all stakeholders.”
If the Proposal is approved, the Company is offering to repurchase bonds through a $47 million tender offer, which, together with the cancellation of the Company’s own bonds ($5.9 million), will reduce the outstanding amount of the Bond by approximately 21%. Several large bondholders, including the Lundin family, have indicated that they do not intend to participate in the tender offer, allowing the remaining bondholders to reduce the size of their position by a significantly larger percentage through the tender. Any unused tender amount will be repaid pro-rata to all bondholders.
The size of the proposed tender exceeds the amount of the next two scheduled amortisations per the current Bond terms, and, with the proposed cash sweep mechanism effective July 30, 2024, the Company intends to accelerate debt repayment in order to optimize its capital structure.
The Lundin family has agreed to extend their subordinated loan to the Company beyond the proposed new maturity of the Bond, with no other changes to the loan terms if the written resolution is passed by bondholders.
The summons can be found on the Nordic Trustee website (https://new.stamdata.com).
Pareto Securities has been engaged as Manager for the contemplated proposal with ABG Sundal Collier and Clarksons Securities engaged as Co-Managers.
All currency amounts indicated as “$” in this news release are expressed in United States dollars.
