Prosafe SE: Restructuring plan agreed with lenders

Reference is made to earlier information provided regarding Prosafe SE’s (“Prosafe” or the “Company”) ongoing financial process with its lenders.

Prosafe is pleased to announce that it has received support from lenders of Prosafe SE and Prosafe Rigs Pte. Ltd. on a comprehensive and material restructuring of the financial indebtedness of the group (the “Transaction”). The Company has received acknowledgment of credit approval (subject to certain conditions) in support of the Transaction from ca. 79% across the USD 1300 million facility and the USD 144 million facility with additional credit approvals expected by mid-June 2021.

The terms of the Transaction will result in significant de-leveraging of the balance sheet with ca. 75% debt reduction, corresponding reduction in annual debt service, a sufficient cash balance and in sum a significantly improved balance sheet and improved financial flexibility.

Highlights of the proposed financial restructuring:

• Significant de-leveraging: ca. USD 1,100 million of total debt reduction (amount subject to timing of closing and accrued interest to that date). Reinstatement under the USD 1,300 million facility and the USD 144 million facility of USD 250 million and USD 93 million, respectively.
• Significant runway: No mandatory debt maturities until December 2025.
• Reduced interest costs: ca. USD 9 million in annual debt servicing costs post-transaction.
• Financial flexibility: no fixed amortisation on the reinstated debt facilities. All principal repayments prior to maturity occurring via a new group cash sweep mechanism.
• Liquidity headroom: Sufficient liquidity well in excess of agreed minimum cash covenant.  
• Equitisation: ca. USD 1,100 million of debt reduction across the Company’s bank facilities (amount subject to timing of closing and accrued interest to that date), outstanding interest rate swaps, other financial liabilities and contingent liabilities to be equitized at closing into 99% of Prosafe SE equity.
• Implementation: to the extent Prosafe does not receive unanimous support for the restructuring from all stakeholders, the Company intends to implement the Transaction using a Singapore Scheme of Arrangement combined with other arrangements if required. The Transaction will also require approval from the Company’s shareholders in an extraordinary general meeting. Notice of such meeting will be issued in due course.

Jesper K. Andresen, Prosafe’s CEO says, “The support for a comprehensive restructuring from our lenders is a key milestone in the process to implement a sustainable financial solution. We are pleased to have achieved this consensually among our lenders which reflects the strong support we have enjoyed from them throughout the process and which has enabled us to continue our business as usual and protect and generate value. Pending remaining credit approvals and a possible Singapore Scheme of Arrangement combined with other arrangements to complete the implementation, Prosafe will continue to position the company and focus on protecting and creating value for all its stakeholders”.

Detailed terms for the restructuring:

Amended and Restated USD 1,300 million facility

• Cash: USD 38 million subject to registered security interests/set-off rights to be utilized as cash repayment at par at completion
• Debt reinstatement: USD 250 million
• Maturity: December 2025
• Interest rate: L+2.50% payable in cash
• Equitisation: remaining balance of ca. USD 1,000 million to be equitised in exchange for ca. 89% of equity (assuming full equitisation of USD 45 million Westcon Tranche)

Amended and Restated USD 144 million facility

• Cash: USD 9 million cash subject to registered security interests/set-off rights to be utilized as repayment at par at completion
• Debt reinstatement: USD 93 million
• Maturity: December 2025
• Interest rate: L+2.50% payable in cash
• Equitisation: remaining balance of USD 37 million to be equitised in exchange for ca. 3% of equity

Interest Rate Swap Liabilities

• To be fully equitised in exchange for ca. 2% of equity

Cosco Seller’s Credit for the Safe Notos

• Unless a consensual agreement is made with Cosco ca. USD 20 million to be fully equitised in exchange for ca. 2% of equity

Westcon Tranche and Westcon Claim

• A Westcon Tranche of USD 45 million (contingent liability) is included in the agreement with lenders. The Company shall make cash payments on the Westcon Tranche only to the extent it receives any proceeds from the Westcon Court case while any remaining portion would be fully equitized. If the judgement in the Gulating Court of Appeal in favour of Westcon (the “Westcon Claim”) becomes final pending the decision by the Supreme Court, the Westcon Tranche is likely to be equitized in favour of the lenders in the USD 1300 million facility
• NOK 245 million of the Westcon Claim is secured by a bank guarantee and will be covered from cash in the company following a final binding judgement in favour of Westcon up to this amount.
• Any unsecured portion of the Westcon Claim over and above the NOK 245 million guaranteed amount provided to Westcon to be equitized in exchange for ca. 3% equity (estimate)

Cosco Seller’s Credit for the Safe Eurus

• No changes to the terms of the Eurus Promissory Note as restructuring does not include the borrowing entity

Convertible Bonds and Existing Shareholders

• Convertible Bonds shall be converted into shares
• Convertible Bond holders and existing shareholders together will hold 1% of equity

Implementation

• Reference is further made to the Company’s updates, latest on 27 May 2021, regarding the moratorium protection in Singapore as part of the ongoing financial process to facilitate protection of going concern value pending finalization of term sheet negotiations with its major creditors and, thereafter, implementation of the agreed solution. Prosafe's objective is to continue business as normal during this final phase of discussions and the implementation process. To the extent that a fully consensual solution is not achievable, the intention is to implement a solution using a Singapore Scheme of Arrangement combined with other arrangements, to the extent required.

The Company will make the appropriate announcements as and when there are further developments on implementation of the Transaction. Please monitor Prosafe SE's website for any announcements or updates on the process.

Moelis & Company are acting as financial advisors, and Schjødt and Clifford Chance are acting as legal advisors to Prosafe in connection with the restructuring.

Prosafe is a leading owner and operator of semi-submersible accommodation vessels. The company is listed on the Oslo Stock Exchange with ticker code PRS. For more information, please refer to .

Stavanger, 4 June 2021

Prosafe SE

For further information, please contact:

Jesper K. Andresen, CEO

Phone: /

Stig Harry Christiansen, Deputy CEO and CFO

Phone: /

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by Cecilie Helland Ouff Senior Manager Corporate Finance and Treasury at Prosafe on 4 June 2021 at 08:00 CEST.