Polarcus Limited: Launch of fully subscribed equity private placement
6 Oct 2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES
The Board of Directors (the “Board”) of Polarcus Limited (“Polarcus” or the “Company”) (OSE: PLCS) is proposing to issue shares with gross proceeds of approximately USD 35 million through a private placement (the “Private Placement”) at a share price of NOK 1.40 per share directed at professional Norwegian and international investors. Pre-subscriptions for the full amount have been received from a combination of current shareholders and new investors. ABG Sundal Collier Norge ASA (the “Manager”) has been retained to advise on and effect the Private Placement.
The net proceeds from the Private Placement will be used to strengthen the Company’s financial position. The proceeds will furthermore count as EBITDA for the purpose of the Debt Service Ratio financial covenant under the existing USD 410 million fleet bank facility agreement entered into between the Company and DnB ASA and DVB Bank SE, Nordic Branch, Garanti-instituttet for Eksportkreditt (GIEK), and Eksportkredit/Eksportfinans ASA (the “Fleet Bank Facility”).
The “Debt Service Ratio” covenant is defined as “EBITDA divided by total interest and principal payments on external debt, not including repayments made before or at final maturity date that is refinanced by new debt”. In relation to the contemplated Private Placement the Company has agreed an amendment to the Fleet Bank Facility related to a reset of the Debt Service Ratio. Under the revised covenant, Polarcus shall, on a consolidated basis, maintain a Debt Service Ratio >1.6x from Q4 2014, >1.75x from Q2 2014 and >2.0x from Q4 2015.
The minimum order in the Private Placement has been set at an amount equaling at least EUR 100,000. The application period will commence at 16:30 CET today and close on 07 October 2014 at 08.00 CET. The Board may, however, at any time resolve to close or extend the application period at its own discretion.
Current shareholders will be given preference in the allocation. The final allocation will be made at the Board’s sole discretion. The Company will announce the result of the Private Placement through a stock exchange notice expected to be published before opening of trading on the Oslo Stock Exchange tomorrow, 07 October 2014.
The shares issued in the Private Placement will be registered at a separate ISIN number and may not be traded at Oslo Børs until the Company has issued a listing prospectus and the new shares have been registered in the VPS under the Company’s ordinary ISIN.
Part of the Private Placement, above 143 million shares, will be subject to a resolution by an extraordinary general meeting (“EGM”) of the Company. The Manager has pre-agreement with investors that will be allocated shares subject to EGM approval.
The Board will propose to conduct a subsequent repair issue of up to 25,000,000 shares at the same price to existing shareholders in the Company as of the end of trading on 06 October 2014, as registered in the VPS as of the end of 08 October 2014, not being contacted by the Manager to participate in the Private Placement. Non-tradable subscription rights will be awarded. The existing Shares in the Company will trade exclusive of the right to participate in the repair issue from and including 07 October 2014. Such subsequent repair issue is subject to an EGM voting in favor of increasing the authorized share capital required to conduct the repair issue. The investors and shareholders that have pre-subscribed in the private placement have already accepted to vote in favor of an increase of the Company’s authorized share capital. The Company will call for an EGM shortly.
The Board reserves the right, at its absolute discretion, to cancel the Private Placement at any time.
Polarcus’ third quarter 2014 vessel utilization was as follows:
|Utilization||Q3 – 2014||Q3 – 2013||Q2-2014|
Polarcus expects to report third quarter 2014 consolidated revenues of approximately USD 115 million. The preliminary third quarter 2014 EBITDA and EBIT is estimated to be approximately USD 43 million (37%) and USD 14 million (13%) respectively and net income after tax of negative USD 6 million. The net income was negatively impacted with USD 4 million by a non cash change in fair value of financial instrument. Total cash at the end of the third quarter 2014 was USD 143 million.
Polarcus will publish its complete third quarter 2014 financial results on 13 November 2014.
The Company revises its guidance for 2014 as follows:
EBITDA of approximately USD 140-150 million
CAPEX investments of USD 50 million
USD 20 million relates to the upgrade of Polarcus Naila
Multi-Client cash investments of USD 40 million
Pre-funding level of 60% expected
Polarcus has implemented a cost efficiency program focusing on all areas of the cost base, targeting annualized savings of USD 35 million. In Q3 2014, 30 shore based positions (17% of total) were made redundant with additional remuneration reductions to be effective from January 2015. Furthermore, programs for improving operating costs, supply chain management and operational efficiency have been implemented. These measures will improve profitability in 2015. Combined with the ongoing regionalization of sales and marketing resources, the efficiency program will maintain the Company’s market competitiveness, improve margins, and strengthen the Company’s presence in those key markets globally that the Company believes will see active growth during 2015.
Please find attached Polarcus Company presentation as per 06 October 2014.
Rolf Rønningen, CEO Polarcus, +971 4 436 0800 / +971 50 459 6982
Tom Henrik Sundby, CFO Polarcus, +971 4 436 0800 / +971 50 708 6480
Polarcus (OSE: PLCS) is a pure play marine geophysical company with a pioneering environmental agenda, specializing in high-end towed streamer data acquisition from Pole to Pole. Polarcus operates a fleet of high performance 3D seismic vessels incorporating an innovative design and advanced maritime technologies for improved safety and efficiency. Polarcus offers contract seismic surveys and multi-client projects worldwide and employs over 500 professionals. The Company’s principal office is in Dubai, United Arab Emirates. For more information, visit www.polarcus.com
The information included herein may contain forward-looking statements. Forward-looking statements include all statements that are not historical facts, including but not limited to statements expressing or implying the Company’s intent, belief or current expectations with respect to, among other things, forecasts, estimates, and predictions. Such forward-looking statements necessarily involve risks and uncertainties and are dependent on assumptions, information, data or methods that may be incorrect or imprecise. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealized. Some factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, developments in the oil and gas industry, the demand for seismic services, the demand for data from the Company’s multi-client library, currency risks, political risks, regulatory risks, and unexpected operational setbacks. For a further description of other relevant risk factors we refer to our 2013 Annual Report. The reservation is also made that inaccuracies or mistakes may occur in the information given above concerning the current status of the Company or its business. Any reliance on the information given above is at the risk of the reader, and Polarcus disclaims any and all liability in this respect.
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)