Restructuring advisors are consulting investors of Tullow Oil’s
RBL facility and holders of the $1.75 billion of unsecured bonds to decide how to tackle the debt ahead of $950 million maturing in the next 18 months, Reorg reported today. On Wednesday, Tullow Oil announced its lending syndicate had approved the $1.8 billion capacity under its 2024 RBL facility. This leaves the group with about $500 million of liquidity available between free cash and undrawn amounts under the RBL. Capacity under the facility is reduced by $211 million every six months with the next scheduled reduction being April 2021.
The company warned
in September it may not comply with its financial covenants under the RBL facility due to the unsecured bonds maturing within the testing period. This could result in a default or event of default triggering in April 2021 unless a solution is found. Tullow intends to use the proceeds from the sale of its Ugandan assets to address its liquidity shortfall and ensure compliance with the financial covenants under the RBL.
On Tuesday, Premier Oil
announced it had reached an agreement to merge with Chrysaor and reorganize Premier’s debt. The company is seeking consent from creditors for the approval of the debt restructuring plans arising from the proposed takeover. The company requires the support of at least 75% of creditors to merge. The restructuring plans include the extensions of the maturities of its debt facilities from May 2021 to March 2021 in order to support the implementation of the transaction.
On Wednesday, hotel investor, owner and operator AccorInvest
opened mandat ad hoc
proceedings in France. The group is advised by Rothschild for upcoming debt restructuring negotiations. Rothschild will lead talks with about 20 lenders and evaluate options, including the raising of new capital. The company was heavily affected by Covid-19 with the closure of 62% of its hotels earlier in the year. There are news reports the company is seeking a €450 million French state-backed loan.
Debt Explained has reviewed bond documentation for Tullow Oil HERE
Reorg’s coverage of Tullow Oil is HERE, Premier Oil is HERE and AccorInvest is HERE.
Covenants and WaiversThe Restaurant Group
has modeled scenarios around Covid-19 to test compliance with its financial covenants. Under the group’s projections in the base case, it has sufficient cash to pass all banking covenants. Under the stress case, the group would have cash above £27 million but predicts it would breach the covenants on the TRG plc RCF from June 2021. The group further added that cross defaults are possible between facilities dependent on the circumstances. The company stated it would work with lenders to either waive or amend covenants if trading patterns indicated a breach would be likely.
On Tuesday, Wasps Holdings
, the owner of the U.K rugby union team Wasps, launched a consent solicitation from the holders of its £35 million 6.5% secured bonds due 2022. The group is seeking permission to amend its financial covenants, to incur additional borrowing and allow for redemption of the 2022 notes at par. There will be no consent fee made payable in connection with the consent solicitation. The deadline for bondholders to consent on the amendments is Oct. 27.
U.K tool and equipment supplier HSS Hire
has modeled certain scenarios regarding the future outlook of Covid-19 under its financial statements. Under these scenarios, the company has envisaged it could breach its financials covenants. If this were to occur, the company said it would seek to obtain a waiver agreement with the senior finance facility and revolving credit facility.
Debt Explained’s RCF Tracker is HERE.
Reorg’s coverage of The Restaurant Group is HERE, Wasps Holdings is HERE and HSS Hire is HERE.
On Monday, German drugmaker Cheplapharm
announced the launch of €1 billion equivalent of 7.25 year senior secured notes.The notes will be split into dollar and euro tranches. The €575 million tranche is priced at par with 4.375% below original price talks which were in the mid-to-high 4% region. The $500 million tranche is priced at par with 5.5% right in line within the revised price guidance. Proceeds will be used to fund recent portfolio acquisitions including certain products from LEO Pharma for €300 million and a $562 million Takeda product line.
U.K premium auto manufacturer Jaguar Land Rover
launched $700 million five-year unsecured notes due 2025. Originally launched as $500 million, the notes were later upsized by $200 million following demand on Thursday. Pricing was confirmed at par with a 7.75% coupon right in line with the initial price guidance. The proceeds will be used for general corporate purposes. The unsecured issuance features a springing lien which management stated is to provide comfort to investors if the company did issue secured debt above $400 million, holders would also be granted security.
Debt Explained has reviewed bond documentation for Cheplapharm HERE and Jaguar Land Rover HERE.
Reorg’s coverage of Cheplapharm is HERE and Jaguar Land Rover is HERE.