Vantage Drilling has entered into a definitive loan agreement to finance the Aquamarine Driller. Under the terms of the loan agreement, the lender has agreed, subject to certain conditions, to provide us with a $100.0 million term loan. Vantage will use the proceeds from this loan to fund the construction, completion, commissioning, and initial start-up costs of the Aquamarine Driller. The closing of this transaction is subject to customary closing conditions and is expected to close on or around September 2, 2009.
The loan will bear cash interest at 15% per annum, along with a pay-in-kind interest component. The loan will mature five years from the closing date. Vantage will have two options to retire the loan from the lender, so long as no event of default has occurred and is continuing: (i) between September 1, 2011 and August 31, 2012, Vantage may pay the lender all accrued and unpaid cash interest due on the loan plus $127.5 million; and (ii) between September 1, 2012 and August 31, 2014, Vantage may pay the lender all accrued and unpaid cash interest due on the loan plus $140.0 million.
The lender will hold a first priority security interest in the Aquamarine Driller and will be entitled to an assignment of certain of Vantage's rights under any contracts relating to the Aquamarine Driller.
The loan agreement has a variety of covenants, including, one financial covenant for the Borrower (debt service coverage test) and administrative reporting requirements.
This news release does not constitute an offer to sell or solicitation of an offer to buy any security, nor will there be any sale of such security in any jurisdiction in which such offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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