SeaBird Obtains All Consents Required for the Restructuring

Source: 8/1/2017, Location: Europe

SeaBird Exploration Plc (SeaBird) is pleased to announce that all consents required for the comprehensive restructuring announced 26 May 2017 have now been obtained.

The Company has signed an agreement with Glander whereupon USD 1,911,896 of the principal amount and all accrued interest as of 3 June 2017 owed to Glander under the Glander Credit Facility shall be irrevocably repaid and discharged upon the issuance of SeaBird shares to Glander at NOK 5.00 per share and that the remaining claim of Glander under the Glander Credit Facility of USD 440,591 will be amended with the maturity date being 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. As part of the agreement there will be a 60 days post-closing due diligence period where TGS will have the opportunity to return to Seabird certain parts of the multi-client libraries that they may elect not to take ownership of. In relation to this agreement between the Company and TGS there has also been established an Income Distribution Agreement between TGS and the Bond Trustee that will secure the Tranche B bondholders and Glander 25% of the income from any utilization, sale or other disposal of the multi-client libraries by TGS, less costs (defined as 10% of sales).

The Company has also entered into an addendum to the Munin Charter Contract pursuant to which the charter period for the Munin Charter Contract will be extended to 30 June 2020, the charter hire will be reduced to USD 2,088 per day for the period 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. In accordance with this addendum, the difference between the new charter hire of USD 2,088 per day and the remaining and unpaid previous charter hire shall be converted into SeaBird shares at NOK 5.0 per share in accordance with the terms of the restructuring.

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 effectuate the closing of 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 on or around 3 August 2017.

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

As stated in the Company's Q1 2017 financial report, the Company requires additional funding for working capital purposes. The Company continues its efforts to obtain new equity financing and is in active dialogue with potential capital sources in such respect. Any equity transaction will require the increase of authorized share capital and the Company will therefore call a new EGM to be held 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. There can be no guarantee that sufficient additional financing is available in a timely manner, and the absence of additional financing would have the effect that the Company will be unable to continue operations.

ABG Sundal Collier ASA and Arctic Securities AS act as financial advisors to the Company. Advokatfirmaet Schjodt AS acts as Norwegian legal counsel to the Company.

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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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