Financing update and restructuring proposal


Stavanger, 15 December 2014:  Reference is made to previous stock exchange notices where Norwegian Energy Company ASA ("Noreco" or the "Company") has informed about impairments and negative developments in production performance, as well as to the summons to bondholders' meetings of 4 December 2014 to consider certain waivers and deferral of amortisation payments. 

On 12 December 2014 the Company requested a temporary suspension of the Company's shares and bonds on the Oslo Stock Exchange pending discussions concerning amendments to the summons.

The discussions concerning the summons were initiated by the Company, which after renewed considerations has concluded that it is necessary to also request a deferral of the interest payments (and not only the amortisation payments) that were due on the Company's bonds on 9 December 2014. Given this and as payment of interest was an integral part thereof, the previous summons and negotiated waiver and deferral terms can no longer be met.

“Noreco’s financial situation and outlook has continued to deteriorate due to the significant and continued drop in oil prices, increases in projected operating costs and accelerated retention of cash to cover future abandonment costs,” says Tommy Sundt, CEO of Noreco.

It is the Board's view that circumstances now dictate that a swift solution to its financial situation must be sought. The Board has therefore decided to put forward a restructuring proposal as attached to this release for discussion with its stakeholders.

“While we continue to pursue opportunities to best preserve values for all stakeholders, we need to accelerate work on an overall financial restructuring,” Tommy Sundt says.

As follows from the attached document, the Board’s current assessment is that full conversion of bond debt is necessary to maintain going concern and to create a sustainable solution where values can be best preserved and underlying values realised for all financial stakeholders.

The Company is in dialogue with the Nordic Trustee and bondholders' representatives concerning a renewed set of waiver and deferral terms, and has also initiated discussions with Nordic Trustee and bondholders' representatives concerning the Board’s restructuring proposal.

For further information on the Company's proposed restructuring terms, as well as detailed information on its financial position, cash flow prognoses and asset considerations, please see the presentation attached hereto.

Silje Christine Augustson, Deputy Chair of the Board. Tel.: +47 992 83 900
Tommy Sundt, CEO. Tel.: +47 992 83 900
Odd Arne Slettebø, CFO. Tel.: +47 992 83 900
Geir Arne Drangeid, IR contact. Tel.: +47 913 10 458

Or email:

This information is subject of the disclosure requirements pursuant to

Restructuring proposal