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Msg  15621 of 15624  at  12/21/2016 4:03:45 PM  by


Bond notice




Denne melding til obligasjonseieme er kun utarbeidet på engelsk. For informasjon vennligst kontakt Nordic Trustee ASA

To the bondholders in:

ISIN NO 001 068 9763 9.50 per cent. Iona Energy Company (UK) Limited Senior

Secured Callable Bond Issue 2013/2018

Summons to Bondholders’ Meeting

Oslo, 15 December 2016


Nordic Trustee ASA (formerly Norsk Tillitsmann ASA (the "Bond Trustee")) acts as trustee for the holders of the bonds (the "Bondholders") in the above mentioned bond issue (the "Bond Issue" or the "Bonds") in respect of which Iona Energy Company (UK) Limited (in administration) (formerly Iona Energy Company (UK) Pic (the "Issuer")) is the issuer and Iona Energy Inc. ("Iona" or the "Parent") and Iona UK Huntington Limited (in administration) (the "Huntington Subsidiary") are the guarantors.

All capitalised terms used in this summons (the "Summons") shall have the meaning assigned to them in the bond agreement originally dated 26 September 2013 (as amended on 3 June 2014 and as amended and restated on 17 April 2015) and made between the Issuer, the Parent, the Huntington Subsidiary and the Bond Trustee (the "Bond Agreement") or the summons dated 9 June 2016 (the "June Summons") to the Bondholders’ Meeting held on 16 June 2016 (the "June Bondholders’ Meeting") unless otherwise stated herein.

With the exception of the information set out in paragraph 2.4, the information in this Summons regarding the Issuer is provided by the Joint Administrators, and the Bond Trustee expressly disclaims all liability whatsoever related to such information.


2.1 The Bridge Transaction

On 29 January 2016 the Joint Administrators received an indicative offer from Bridge Petroleum Limited ("Bridge") for the entire issued share capital in the Issuer (the "Issuer Shares") in exchange for an element of upfront cash consideration and deferred consideration. On 2 June 2016, the Bond Trustee entered into a sale and purchase agreement with Bridge Petroleum 2 Limited ("BP2") (the "Bridge SPA") pursuant to which, BP2 agreed to acquire the Issuer Shares in accordance with the Offer (the "Transaction").

We refer to the updates published on Stamdata dated 19 August 2016 and 15 September 2016 pursuant to which the Joint Administrators informed Bondholders that the long-stop date under the Bridge SPA had been extended.

By an update dated 17 November 2016, Bondholders were informed that the Transaction could no longer proceed as one of Bridge’s proposed financiers had determined that the plan for the development of the Orlando Asset no longer met its investment criteria. As a result of this

PO Box 1470 Vika, N-0116 Oslo, Haakon Vlls gate 1, Oslo


determination and the loss of funding that the proposed financier would have provided, Bridge has informed the Joint Administrators that it is no longer able to complete the Transaction.

Copies of each of the documents referred to above can be found on or upon request to the Bond Trustee ('

2.2 Alternative Transaction

As set out in the Joint Administrators’ statement of proposals dated 10 Februaiy 2016, the primary objective of the administration of the Issuer was to rescue the Issuer as a going concern pursuant to statutory objective (a) of paragraph 3(1) of Schedule B1 to the Insolvency Act 1986.

Since receiving Bridge’s notification that it was not able to complete the Transaction, and in consultation with an ad hoc committee of Bondholders representing in aggregate in excess of 76% of the Voting Bonds, the Joint Administrators have been considering the remaining options open to the Issuer. The Joint Administrators have entered into discussions with an interested party and, on 7 December 2016, they signed an exclusivity agreement with that interested party in respect of the sale of the Issuer Shares (the "Alternative Transaction"), with a view to completion occurring by 31 January 2017.

The Joint Administrators will pursue the Alternative Transaction and will update the Bondholders as soon as possible in this regard.

Under Scottish and English law, the administrations of the Issuer and of the Huntington Subsidiaiy respectively will automatically terminate on 6 January 2017. In order to provide the Joint Administrators with time to explore the Alternative Transaction, consult with the interested party, and administer the affairs of the Companies in an orderly fashion, it is proposed that the administration of the Issuer and the administration of the Huntington Subsidiary be extended. Notwithstanding the extension of the administrations of the Issuer and of the Huntington Subsidiary for a period of one year, the Joint Administrators will be able to cease to act as Joint Administrators before the end of the one year extension period when all matters in respect of each administration have been dealt with.

The Joint Administrators have prepared an administration extension report, a copy of which can be found on or upon request to the Bond Trustee

2.3 Funding

The Joint Administrators consider that sufficient funds remain available under their control to explore the remaining options open to the Issuer and to the Huntington Subsidiaiy. This has been supported by further reductions in operating expenses, fixed fee arrangements for the Joint Administrators, and a requirement for cost contributions to be made by any prospective purchaser.

2.4 Release of funds in the Escrow Retention Amount

The Bond Trustee currently holds an amount equal to US $7,016,662 (the "Escrow Retention Amount") in accordance with the authority granted to it at the December Bondholders’ Meeting.

Pursuant to the authority granted to it as the June Bondholders’ Meeting the Bond Trustee was authorised to retain an amount equal to US $2 million from the Escrow Retention Amount in order to fund potential Recoveiy Actions, to make certain payments pursuant to the Transaction, and to provide the Bond Trustee with funding to meet any potential fees, costs, expenses and liabilities that it may incur in its capacity as Bond Trustee, Security Agent or otherwise. As it is no longer possible to complete the Transaction, the Bond Trustee considers that it is now appropriate make a distribution to Bondholders from the Escrow Retention Amount of an amount equal to US $6 million.

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The amount of US $6 million will be paid as a principal payment only and will be calculated on a pro rata basis. No interest will be paid to Bondholders. The record date for the distribution shall be close of business on the date of the Bondholders’ Meeting and the distribution will be paid on the date falling 5 Business Days after the record date.

The Bond Trustee will retain an amount equal to US $1,016,662 million from the Escrow Retention Amount (the "NT Retention Amount") in the short term to be applied by the Bond Trustee towards any costs and expenses required in connection with the pursuit of the Alternative Transaction and to pay any costs and expenses incurred by the Bond Trustee in its capacity as Bond Trustee and Security Trustee. Once any such costs and expenses have been paid, it is anticipated that further distributions from the NT Retention Amount will be made to Bondholders as soon as possible.


In light of the above, the Issuer hereby proposes the following (the "Proposals"):

3.1 Extension of the administration of the Issuer

The administration of the Issuer shall be extended from 6 Januaiy 2017 to 6 January 2018 pursuant to paragraph 76(2)(b) of Schedule B1 to the Insolvency Act 1986.

3.2 Extension of the administration of the Huntington Subsidiary

The administration of the Huntington Subsidiary shall be extended from 6 January 2017 to 6 January 2018 pursuant to paragraph 76(2)(b) of Schedule B1 to the Insolvency Act 1986.


Bondholders may contact the Joint Administrators of the Issuer for further information:

FTI Consulting LLP Chad Griffin +44 203 727 1212

FTI Consulting LLP Lisa Rickelton +44 203 727 1441

FTI and each of the Joint Administrators in their personal capacities expressly disclaims any and all liability whatsoever in connection with the Proposals (including but not limited to the information contained in the Summons).


5.1 The Issuer’s evaluation

In the opinion of the Joint Administrators, the Proposals represent the best way to maximise recoveries to Bondholders that is available in the current circumstances.

5.2 Non-reliance

The Proposals are put forward to the Bondholders without further evaluation or recommendations from the Bond Trustee and nothing herein shall constitute a recommendation to the Bondholders by the Bond Trustee. The Bondholders must independently evaluate the Proposal and vote accordingly.

None of the Bond Trustee, the Joint Administrators or their respective advisers accepts any responsibility to Bondholders in relation to the impact of the Proposals on Bondholders’ tax or


accounting affairs. Each Bondholder should consult their own independent legal advice in relation to any tax and/or accounting implications the Proposals.

5.3 Pre-acceptance

The Issuer has informed the Bond Trustee that Bondholders holding in excess of 76% of the Outstanding Bonds have indicated their support for the Proposals and that they will provide irrevocable undertakings ahead of the Bondholders’ Meeting.


Bondholders are hereby summoned to a Bondholders’ Meeting:

Time: 22 December 2016 at 13:00 hours (Oslo time)

Place: The premises of Nordic Trustee ASA,

Haakon VHs gt 1, 0161 Oslo - 6th floor


1. Approval of the Summons.

2. Approval of the Agenda.

3. Election of two persons to co-sign the minutes together with the chairman.

4. Consent to the Proposal(s).

It is proposed that the Bondholders’ Meeting resolves the following:

The Bondholders’ Meeting hereby adopts the resolutions set out in the Proposals as described in section 3 of the Summons for this Bondholders ’ Meeting.

The Bond Trustee is hereby authorised to prepare, negotiate, finalise and enter into the necessary agreements in connection with documenting the decisions made at the Bondholders’ Meeting as well as carry out necessary completion work, including agreeing on necessary amendments to the Bond Agreement and any other Finance Document. "


To approve the Proposals, Bondholders representing at least 2/3 of the Bonds represented in person or by proxy at the meeting must vote in favour of the resolution. In order to have a quorum, at least 5/10 of the voting Bonds must be represented at the meeting.

Please find attached a Bondholder’s Form from the Securities Depository (VPS), indicating your bondholding at the printing date. The Bondholder’s Form will serve as proof of ownership of the Bonds and of the voting rights at the Bondholders’ Meeting. If the Bonds are held in custody - i.e. the owner is not registered directly in the VPS - the custodian must confirm: (a) the owner of the bonds, (b) the aggregate nominal amount of the Bonds, and (c) the account number in VPS on which the Bonds are registered.

The individual Bondholder may authorise the Bond Trustee to vote on its behalf, in which case the Bondholder’s Form also serves as a proxy. A duly signed Bondholder’s Form, authorising the Bond Trustee to vote, must then be returned to the Bond Trustee in due time before the meeting is scheduled (by scanned e-mail, telefax or post - please see the first page of this letter for further details).

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In the event that Bonds have been transferred to a new owner after the Bondholder’s Form was made, the new Bondholder must bring to the Bondholders’ Meeting or enclose with the proxy, as the case may be, evidence which the Bond Trustee accepts as sufficient proof of the ownership of the Bonds.

For practical purposes, we request those who intend to attend the Bondholders’ Meeting, either in person or by proxy other than to the Bond Trustee, to notify the Bond Trustee by telephone or by e- mail ( by 16:00 hours (4:00pm) (Oslo time) the Banking Day before the meeting takes place.

Yours sincerely

Vivian Trøsch

Enclosed: Bondholder’s Form


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