Tullow Oil 2022 Bondholders Hire Akin Gump to Advise in Debt Negotiations, RBL Lenders Appoint Perella Weinberg Partners, Clifford Chance

Holders of Tullow Oil’s $650 million 6.25% senior unsecured 2022 notes have hired Akin Gump as their legal advisor for debt talks with the company next year, sources close told Reorg. Akin Gump did not wish to comment. The creditor group is looking to mandate a financial advisor soon.

The company’s reserve-based lending facility, or RBL, lender group mandated Perella Weinberg Partners, sources close told Reorg. Clifford Chance was mandated as the group’s legal advisor, sources close. Clifford Chance did not wish to comment.

The company launched a bondholder identification process at the end of November, sources said and is working with Latham & Watkins and PJT, as reported. The company did not respond for comment.

Holders of Tullow’s $300 million 6.625% convertible notes due 2021 are expected to form a separate group. A single bondholder has amassed a blocking stake in the 2021 convertible bonds and is pushing for par repayment of the notes when they mature in July 2021, sources close said.

The group’s 2021 bonds are quoted in the mid-80s, the 2022s in the high 70s and the $800 million 7% senior unsecured 2025 notes in the mid-60s.

Tullow Oil’s bondholders include Tresidor, Amundi, Finisterre, Aegon, BlackRock, Pictet, GML Capital, Credit Agricole, Barings and Pimco, as reported.

The company’s capital structure is below:
 
On Nov. 25, the company held a capital markets day for its investors. Management declined to answer exactly how it plans to address its capital structure, including bond maturities in July 2021 and April 2022, and use of $500 million of proceeds generated from the sale of its assets in Uganda.

CFO Les Wood said during the presentation that RBL lenders approved a waiver of the year-end test and noted that they have been supportive whenever the company has faced covenant-related issues. As of Nov. 10, Tullow had $1 billion of liquidity and, during the presentation, management said it expects to have no less than $500 million in the future. Tullow is also working on reducing its net debt to between $1 billion and $1.5 billion, excluding leases by 2025, down from $3 billion on June 30 and $2.4 billion on Nov. 10.

--Bianca Boorer, Aurelia Seidlhofer, Jaishree Kalia