Homepage
PR Newswire
06-12-2014, 12:31 AM
1) A step in the right direction I reckon - focussing on deleveraging of the balance sheet.
2) Not a bad deal - pay 2% more interest cost but Linc gets more flexibility and optionality.
3) Linc should have no problem in full redemption after the sucessful divestment of conventional coal assets (at reasonable price of course)- if that happened, then, all other business segments (with the exception of the conventional O&G business segment in the USA) of Linc would be debt free.
Looking forward to non-core asset divestment news and more positive Arckaringa drilling results. Will see !
(vested)
________________________________________________________________________________________________________________
PROPOSED US$50M REDUCTION & AMENDMENT TO CONVERTIBLE NOTES
• Amendment terms agreed with the holders of a majority in principal amount of US$200 million 7% convertible notes due 2018 (the "Notes"), subject to requisite approval process.
• Key terms: US$50 million redemption to reduce the principal amount of outstanding Notes from US$200 million to US$150 million, the existing noteholders put option to move from 10 April 2015 to 10 April 2016, and a call option will be exercisable by the Company up to 10 April 2016.
Key Terms
The key terms of the proposed amendments are as follows:
1. The Company will redeem US$50m of existing deal at par plus accrued interest.
2. The noteholders' put date is moved back 12 months to 10 April 2016.
3. The Company has an immediate right to repurchase any and all outstanding Notes at a "Make Whole Price" (“MWP”) up to original 10 April 2015 put date subject to a notification period ("1st Call").
(MWP for the 1st Call means par value of the notes plus current accrued interest plus interest that would have accrued but remains unpaid up to 10 April 2015.)
4. After April 2015, the Company has the right to repurchase any and all outstanding Notes at MWP to the new put date subject to a notification period until 10 April 2016 ("2nd Call").
(MWP for the 2nd Call means par value of the notes plus current accrued plus interest that would have accrued but remains unpaid up to 10 April 2016.)
5. Coupon will increase from 7% to 9% per annum paid semi-annually commencing on 10 April 2015 if the notes have not been fully repaid beforehand.
6. The conversion price of the notes will be reset to S$1.3411 immediately upon approval of the amendments.
7. On 10 April 2015, the conversion price will be reset to the lower of 115% of spot reference price (being the average of 10 days VWAP preceding 10 April 2015) or the existing conversion price ("2nd Reset"). The 2nd Reset is subject to a conversion price floor of S$0.77.
Company Commentary
Peter Bond, Executive Chairman of Linc Energy, stated, “The Company is focused on deleveraging its balance sheet and we are delighted to reduce the size of the convertible notes by US$50 million and delay the noteholders put option to 10 April 2016. Importantly, the Company has negotiated a call option until the revised put date to give it the ability to repay the convertible notes at its discretion. This is beneficial given the previously announced discussions that the Company is having with a variety of parties with respect to the divestment of some of its non-core assets”.
“Linc Energy now has the flexibility and optionality to move forward with its strategy in a financially prudent manner. We look forward to updating the market on our operational activity including the current Arckaringa drilling program and our non-core asset sale discussions in due course.” Mr Bond said.
http://infopub.sgx.com/FileOpen/2014.12....eID=327244
2) Not a bad deal - pay 2% more interest cost but Linc gets more flexibility and optionality.
3) Linc should have no problem in full redemption after the sucessful divestment of conventional coal assets (at reasonable price of course)- if that happened, then, all other business segments (with the exception of the conventional O&G business segment in the USA) of Linc would be debt free.
Looking forward to non-core asset divestment news and more positive Arckaringa drilling results. Will see !
(vested)
________________________________________________________________________________________________________________
PROPOSED US$50M REDUCTION & AMENDMENT TO CONVERTIBLE NOTES
• Amendment terms agreed with the holders of a majority in principal amount of US$200 million 7% convertible notes due 2018 (the "Notes"), subject to requisite approval process.
• Key terms: US$50 million redemption to reduce the principal amount of outstanding Notes from US$200 million to US$150 million, the existing noteholders put option to move from 10 April 2015 to 10 April 2016, and a call option will be exercisable by the Company up to 10 April 2016.
Key Terms
The key terms of the proposed amendments are as follows:
1. The Company will redeem US$50m of existing deal at par plus accrued interest.
2. The noteholders' put date is moved back 12 months to 10 April 2016.
3. The Company has an immediate right to repurchase any and all outstanding Notes at a "Make Whole Price" (“MWP”) up to original 10 April 2015 put date subject to a notification period ("1st Call").
(MWP for the 1st Call means par value of the notes plus current accrued interest plus interest that would have accrued but remains unpaid up to 10 April 2015.)
4. After April 2015, the Company has the right to repurchase any and all outstanding Notes at MWP to the new put date subject to a notification period until 10 April 2016 ("2nd Call").
(MWP for the 2nd Call means par value of the notes plus current accrued plus interest that would have accrued but remains unpaid up to 10 April 2016.)
5. Coupon will increase from 7% to 9% per annum paid semi-annually commencing on 10 April 2015 if the notes have not been fully repaid beforehand.
6. The conversion price of the notes will be reset to S$1.3411 immediately upon approval of the amendments.
7. On 10 April 2015, the conversion price will be reset to the lower of 115% of spot reference price (being the average of 10 days VWAP preceding 10 April 2015) or the existing conversion price ("2nd Reset"). The 2nd Reset is subject to a conversion price floor of S$0.77.
Company Commentary
Peter Bond, Executive Chairman of Linc Energy, stated, “The Company is focused on deleveraging its balance sheet and we are delighted to reduce the size of the convertible notes by US$50 million and delay the noteholders put option to 10 April 2016. Importantly, the Company has negotiated a call option until the revised put date to give it the ability to repay the convertible notes at its discretion. This is beneficial given the previously announced discussions that the Company is having with a variety of parties with respect to the divestment of some of its non-core assets”.
“Linc Energy now has the flexibility and optionality to move forward with its strategy in a financially prudent manner. We look forward to updating the market on our operational activity including the current Arckaringa drilling program and our non-core asset sale discussions in due course.” Mr Bond said.
http://infopub.sgx.com/FileOpen/2014.12....eID=327244
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.