Paratus Energy Services Ltd. an exempted company limited by shares incorporated under the laws of Bermuda formerly known as Seadrill New Finance Limited (the "Company") announced that it has commenced a solicitation of consents (the "Consent Solicitation") from the holders of its Senior Secured Notes due 2026 (CUSIPs 81173J AC3, G8000A AH6 and 81173J AD1; ISINs US81173JAC36, USG8000AAH61 and US81173JAD19) (the "Notes") to approve the Proposed Amendments (as defined below) to that certain Amended and Restated Indenture, dated as of January 20, 2022 (as subsequently amended and supplemented, the "Indenture"), governing the Notes. The Consent Solicitation is being made in accordance with the terms and subject to the conditions stated in a Consent Solicitation Statement, dated July 14, 2023 (the "Consent Solicitation Statement").
The Consent Solicitation will expire at 5:00 p.m., New York City time, on July 28, 2023, unless extended or earlier terminated (such time on such date, as the same may be extended or earlier terminated, the "Expiration Time"). The Consent Solicitation is subject to certain conditions, including, among others, the receipt at or prior to the Expiration Time of consents to the Proposed Amendments from holders representing at least a majority in aggregate principal amount of the Notes outstanding (including, without limitation, PIK Notes (as defined in the Indenture), if any) as of the record date for the Consent Solicitation of 5:00 p.m., New York City time, on July 13, 2023 (the "record date") considered together as a single class (the "Requisite Consents"). As of the record date, there was approximately $715,479,495 aggregate principal amount of the Notes outstanding (including, without limitation, PIK Notes (as defined in the Indenture)).
All capitalised terms used but not defined in this announcement shall, unless the context otherwise requires, have the meaning ascribed to them in the Indenture.
The purpose of the Consent Solicitation is to obtain approval of the following:
- the insertion and amendment of certain definitions in Article 1, Section 1.01 of the Indenture, including, amongst others, a new definition of "NIBD EBITDA Ratio" and a new definition of "NIBD EBITDA Threshold", and amendments to the definition of "Permitted Investments";
- the removal of the obligation in Article 4, Section 4.03(b) for the Company to hold publicly accessible conference calls to discuss its annual and quarterly reports;
- amendments to Article 4, Section 4.07(a)(i) and Section 4.07(a)(ii) of the Indenture such that the Company may (i) declare or pay any dividend or make a distribution to the holders of its Capital Stock; and (b) purchase, redeem and acquire shares of the Company's Capital Stock, in each case subject to (x) payment or a commitment to pay interest payable by the Company in respect of certain interest periods as cash interest; (y) that the NIBD EBITDA Ratio at the time the relevant action is made is and will, immediately following such action, be equal to or below the applicable NIBD EBITDA Threshold; and (z) the Company has, at the time the relevant action is made and, immediately following such action, on a pro-forma basis unrestricted cash of not less than $20.0 million;
- amendments to Article 4, Section 4.07(b)(vii) of the Indenture such that the Company may, so long as no Default or Event of Default has occurred and is continuing, make any other Restricted Payment provided that at the time of such Restricted Payment being made, and immediately following such Restricted Rayment being made, on a pro forma basis the Company has unrestricted cash of not less than $20.0 million;
- the insertion of a new Section 4.07(c) in Article 4 of the Indenture which expressly provides that nothing in the Indenture shall restrict or prevent the Company or any Restricted Subsidiary or Unrestricted Subsidiary from effecting, undertaking or participating in any Permitted Investment unless expressly stated otherwise;
amendments to the definition of "Permitted Debt" in Article 4, Section 4.09(b) of the Indenture to include the incurrence by the Company or any Restricted Subsidiary or Unrestricted Subsidiary of Indebtedness given in the ordinary course of business for the purpose of guaranteeing or indemnifying against the performance of, or payment under, any arrangements for the purchase or provision of services or the supply or provision of a unit, vessel or Rig;
- the removal of Article 4, Section 4.31 such that the conditions contained therein do not apply to that Permitted Debt defined in Section 4.09(b)(xvi) being Indebtedness of the Company and any Restricted Subsidiary not to exceed $250.0 million;
- amendments to Article 4, Section 4.09(b)(xvii) such that Permitted Debt is taken to include from and including the occurrence of a SeaMex Restricted Subsidiary Event, Indebtedness of the SeaMex Group not to exceed in aggregate $350.0 million; and
- amendments to Article 4, Section 4.12(a) and Section 4.13(a) such that no Restricted Subsidiary shall be required to grant any Lien in conjunction with, or as a result, of the creation or entering into of any Indebtedness of any member of the SeaMex Group that is permitted to be incurred under Article 4, Section 4.09(b).
The Proposed Amendments will become effective and operative with respect to the Notes upon receipt of the Requisite Consents and the execution of a supplemental indenture to the Indenture (the "Effective Time"), which may occur prior to the Expiration Time if the Requisite Consents are received before that time. Upon receipt of the Requisite Consents, the Company and the guarantors party to the Indenture intend to execute a supplemental indenture to the Indenture governing the Notes setting forth the Proposed Amendments, and will deliver the supplemental indenture to the trustee under the Indenture for execution. No consents may be revoked after the Effective Time. Upon the Proposed Amendments becoming effective and operative, all holders of the Notes would be bound by the terms thereof, even if they did not deliver consents to the Proposed Amendments.
