Siem Offers Subsea 7 Shares as Option for New Bond

Siem Industries has launched an offering of EUR 200 million senior secured exchangeable bonds due 2021, exchangeable for common shares of Subsea 7, exclusively by way of a private placement to international institutional investors.

Siem added that the offering amount may be increased by up to EUR 75 million should the increase option be exercised prior to pricing, at the sole discretion of the issuer and depending on the aggregate principal amount of 2019 exchangeable bonds to be repurchased pursuant to the concurrent repurchase.

The net proceeds of the offering will be used to repurchase 2019 exchangeable bonds, to reimburse at effective maturity the 2019 exchangeable bonds not repurchased, and for general corporate purposes.

The exchangeable bonds will mature on June 2, 2021 and will be marketed with a coupon of 1.50% – 2.25%, payable semi-annually in arrear.

The exchange price is expected to be set at a premium of 27.5% – 32.5% to the volume weighted average price of the common shares of Subsea 7 on the Oslo Stock Exchange on Thursday, converted at the prevailing EUR:NOK exchange rate at the closing of the market on 26 May 2016.

As at March 31, 2016,  Siem Industries was the largest shareholder in Subsea 7 with approximately 21% stake.

ABG Sundal Collier ASA and BNP Paribas are acting as joint bookrunners of the offering and the repurchase of 2019 bonds.

The repurchase price for any 2019 exchangeable bonds repurchased, if any, will be equal to 99% – 99.5% of the principal amount of the 2019 exchangeable bonds, together with any accrued and unpaid interest, the company said on Thursday.

The final terms of the exchangeable bonds are expected to be announced later today.