As previously announced, Songa Offshore conducted a private placement yesterday in the amount of NOK 265 million. The shares offered in the private placement have been allocated and are in the process of being issued and registered.
The capital raised will, inter alia, be used to cover losses from the Company's TRS exposure. As previously announced to the market, TRS for a total of 2,624,000 shares has been cancelled. Total accumulated losses based on today's shareprice (NOK 20) is US $36.0 million, of which US $18.7 million is realized and in the process of being settled. Remaining TRS exposure for the Company is therefore limited to 2,845,965 shares falling below NOK 20 per share, any NOK 1 negative change in the share price equals NOK 2.8 million (US $430,000) in additional margin call.
The issue price (NOK 25) in the private placement concluded yesterday was done at a substantial discount to the closing price on Tuesday, October 15 (NOK 37.60). Therefore, the Company decided to conduct a repair issue towards existing shareholders not being invited to participate in the private placement in order to ensure that all shareholders are treated fairly, in compliance with Norwegian company and securities legislation. It should be noted that no proceeds from such a repair issue were planned for by the Company in its capital budgeting.
In order to further improve the Company's cash position, the Company has reached an agreement with its lead bank, Nordea, for a credit facility of US $35 million.
As to operations, reference is made to our latest fleet update of October 2. It is confirmed that the fleet continues to operate according to plan.
The Board is confident that through these measures the Company has secured sufficient liquidity and funds for its operations going forward and any further margin calls from the remaining TRS.