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LONDON - Nostrum Oil & Gas Finance B.V., a wholly-owned subsidiary of Nostrum Oil & Gas PLC, has entered an "Event of Default" after failing to make interest payments on its outstanding notes that were due on June 30, according to a press release issued Wednesday.
The company attributed the 30-day payment delay to "a payment administration issue" preventing it from making payments through clearing systems without additional regulatory licenses related to sanctioned bondholders or custodians. The company emphasized that the delay "does not reflect any issue of the Parent’s or Issuer’s solvency or liquidity" and stated that funds for the interest payments are "available and secured."
The default affects two series of notes: USD 5.00% Senior Secured Notes due 2026 with $244,372,000 outstanding, and USD 1.00%/13.00% Senior Unsecured Notes due 2026 with approximately $456,279,196 outstanding.
To address the situation, Nostrum intends to seek regulatory licenses and launch a consent solicitation to modify payment methods and waive defaults. The proposed changes would permit interest payments outside clearing systems or amend payment methods through clearing systems, while waiving any defaults related to the delayed payments.
The consent solicitation will require approval by 75% in principal amount of each series of notes or by 75% of noteholders attending a quorate meeting. The company expects the regulatory approval process to take "a number of weeks" and plans to launch a noteholder meeting "as soon as practicable," with at least 21 days’ notice required for an initial meeting.
The company first announced the payment delay on July 10, with an update on July 22, before confirming the event of default in Wednesday’s statement.
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