July 17, 2019
Sete Brasil creditors will meet August 9 to deliberate on Magni Partners’ new and seemingly final offer to acquire the Urca, Frade, Arpoador and Guarapari rigs. After four months of negotiations, the group raised the value of its proposal from US $ 250 million to US $ 296 million, ensuring contractual improvements.
Sources participating in the negotiations claim that the creditors’ perception of the new value presented is better, even though it is well below the initially stipulated minimum of $ 554 million. The assessment is that lenders are “conformed.”
The date of the new General Meeting of Creditors (AGC) was set during a meeting to clarify details of the process and the new proposal. Most of the requests for clarification were answered by creditors linked to public institutions, who were concerned to avoid future questions about their areas of compliance.
Magni Partners made gains in the negotiations with Brasfels and Jurong Aracruz, arriving at the final proposal about two weeks ago. Offers for the purchase of the four Sete rigs were opened at the end of March, and the deadline to finalize the negotiations ends in September.
Magni to sell rigs
If approved, the purchase of rigs will grant Magni Partners ten-year charter agreement with Petrobras, at a rate of US $ 299,000 / day. The technical conditions of the offer will have to be approved by the oil company. In the proposal presented, the group indicates Etesco as operator of the units.
Drilling companies are betting that Magni Partners will acquire the units to sell them in the future, attracting the long-term contract with Petrobras. It is speculated that the group will finalize the construction works and then seek a buyer.
Executives heard by BE Petroleo consider that the case of Sete Brasil and the trading capacity of Magni Partners and the Brasfels and Jurong yards are close to the limit. Alvarez & Marsal – a law firm that advises the group of rigs – and Licks Contadores Associado (judicial administrator of the process) defend, from the beginning, the sale of the units.
The transaction is part of the judicial recovery process of Sete Brasil, which is conducted by the 3rd Business Court of the Court of Justice of Rio de Janeiro. It involves a liability of about $ 5 billion. Even if the rigs are sold, the group can hardly settle all its debt.
The list of creditors of the company includes Banco do Brasil, Bradesco, FI-FGTS, FGCN, Caixa Econômica, Santander and Canvas, which bought the Itaú BBA credit, among others. The rig group has 12 shareholders: BTG Pactual, Luce, EIG Global Energy Partners, Lakeshore, Previ, Petros, Funcef, Valia, FI-FGTS, Santander, Bradesco and Petrobras.
In addition to Magni Partners, the auction attracted the Keppel Fels group, with a global offer of $ 50 million to acquire the two semisubmersibles under construction at its own site ($ 35 million for Urca and $ 15 million for Frade) .
Source: Brasil Energia