Norwegian Property ASA working to improve debt arrangements and raise equity (NO)

Norwegian Property ASA ("Norwegian Property" or the "Company") has over a period had an objective to strengthen the balance sheet and to secure a robust financial position for the Company. In order to achieve this, Norwegian Property has been working to improve debt arrangements and covenant structures as well as evaluated different strategies to raise equity.

The Board of Directors of Norwegian Property is proposing to issue up to 201.6 million new shares through a private placement ("the Private Placement"). The subscription price will be determined through a book-building process conducted by the Managers with an indicative price from NOK 6.00 (€0.68) to NOK 7.20 per share. The final subscription price may, however, be set within, below or above the indicative price range. The minimum order in the Private Placement has been set to the number of shares that equals an aggregate subscription price of at least NOK 500,000. The proceeds of the Private Placement will be used for repayment of debt in order to strengthen the balance sheet and improve covenant ratios.

The book-building period will commence today (9 June 2009) at 17:30 CET and close on 10 June 2009 at 08.30 CET. The Board of Directors of Norwegian Property may, however, at any time resolve to close or extend the book building period at its own discretion, but in no event earlier than 9 June 2009 at 24:00 CET.

The Managers have received significant pre-commitments from existing shareholders and new investors

The Private Placement is conditional upon inter alia, the extraordinary general meeting in the Company to resolve to write-down the par value of the Company's shares from NOK 25 to NOK 0.5 and to approve the Private Placement.

The Board reserves the right, in its absolute discretion, to cancel the Private Placement at any time.

In addition to proposing the Private Placement, Norwegian Property has negotiated with its key banks potential amendments and changes to the current loan agreements. Several amendments with respect to inter alia covenants and repayment dates for the respective loan agreements have been achieved including, but not limited to (i) securing and extending of the remaining OPAS facility from October 2010 to June 2012; (ii) refinancing of the SEK 565 million stand-alone facility maturing in September 2009 for three years to 2012; (iii) secured available financing to repay 2nd priority bond loan maturing March 2010; and (iv) obtained waivers for LTV and ICR covenants on the "NOK 11,000 million Term Loan and Revolving Credit Facility" and "Oslo Property AS NOK 1,700 million Multicurrency Acquisition and Guarantee Facility Agreement" level up to and including Q2 2011. These amendments are subject to a successful Private Placement and the Private Placement is conditional upon the credit committees in the key banks approving the amendments without any material changes.

Norgani Hotels and Norwegian Property have entered into an amendment agreement with the Fearnley syndicate whereby the put option related to the four Danish hotels can be exercised from 1 March 2011 (instead of 1 January 2010) until 31 December 2012, with a three months settlement period (instead of 30 days), against a cash consideration. This amendment agreement is subject to a successful Private Placement.

Subject to completion of the Private Placement, the Board of Directors will propose to conduct a subsequent repair offering for the shareholders not being offered to participate in the Private Placement in order to enable them to maintain their relative shareholding in the Company.

Norwegian Property has retained Arctic Securities ASA, Pareto Securities AS and Pareto Private Equity AS (collectively referred to as the "Managers") to advice on and effect the potential Private Placement directed towards Norwegian investors and international institutional investors.

Source: Hugin

Related News