Arrow Prospectus - PGS

ARROW SEISMIC ASA – INITIAL PUBLIC OFFERING
9.4 CHANGES IN CAPITALISATION SINCE 31 MARCH 2007
In April 2007, the Company issued a six month NOK 275 million commercial paper. The commercial paper was
drawn on 16 April 2007 as a bridge to equity. The loan is senior unsecured, carries a coupon of 7.00% and has
final maturity date 16 October 2007. The loan was arranged by DnB NOR Bank ASA.
Since 31 March 2007 and up to the date of this Prospectus, the Company has made some USD 20 million in
investments related to the newbuilds and some USD 5 million in investments related to the 2D/source vessels.
9.5 BORROWINGS
9.5.1 USD 170 million secured term loan facility
Late 2005 ASI I, ASI II and ASI III (as borrowers) and Arrow (as guarantor) and GC Rieber Shipping (as parent
guarantor) entered into a facility agreement with Nordea Bank Norge ASA (as agent and lender) for USD 170
million in long-term mortgage financing of the “Geo Atlantic” and the two first seismic new buildings (532 and
533) due for delivery in 2008. The loan facility is secured with first priority account pledges, first priority
assignments in each of ASI II and ASI III rights under the respective tax lease structures of the newbuilds 532
and 533, hereunder the refund guarantees thereto and first priority mortgages in the vessel “Geo Atlantic” and
the newbuilds 532 and 533 as well as security rights over earnings and insurances. In addition the loan is secured
by a parent company guarantee provided by Arrow and charges over the shares in ASI I, ASI II and ASI III.
The facility has a term of ten years with repayment as follows; 2006: USD 3,892,000, 2007: USD 5,144,000,
2008: USD 8,808,000, 2009 -2015: USD 12,448,000. The loan has a margin of 0.90 % over USD LIBOR, falling
to 0.80 % when first newbuilding commence on time charter and 0.70 % when second newbuilding commences
on a time charter.
The key financial covenants are as follows.
(i) Arrow’s consolidated ratio of book equity to total assets shall be a minimum 30 per cent
(ii) Arrow’s consolidated working capital shall at all times be minimum NOK 50 million
(iii) Arrow’s consolidated minimum free and available cash shall at minimum be equal to next 12
months ordinary instalments
The term loan contains a change of control clause, whereby GC Rieber Shipping shall own minimum 50.1 %, or
minimum 34 % if listed on an exchange. Further, Arrow shall own 100 % of ASI I – ASI III. If Arrow is not
listed, it may not pay dividends in excess of 50% of yearly net result, unless the outstanding balance under the
loan agreement is reduced correspondingly.
9.5.2 USD 13.5 million secured term loan facility
In September 2006, ASI IV (as borrower) and Arrow (as guarantor) entered into a loan agreement with Nordea
Bank Norge ASA (as agent an lender) for USD 13.5 million in long-term mortgage part financing of the acquired
vessel “CGG Laurentian”. The facility is secured with a first priority mortgage in the vessel “CGG Laurentian”
as well as security rights over, accounts, charter parties, earnings and insurances. In addition the loan will be
secured by a parent company guarantee provided by Arrow and a charge over the shares in ASI IV.
The facility has a term of five years with USD 675,000 in quarterly repayment with a margin of 0.90 % over
USD LIBOR.
The key financial covenants are as follows:
(iv) Arrow’s consolidated ratio of book equity to total assets shall be a minimum 30 per cent
(v) Arrow’s consolidated working capital shall at all times be minimum NOK 50 million
(vi) Arrow’s consolidated minimum free and available cash shall at minimum be equal to next 12
months ordinary instalments
The term loan contains a change of control clause, whereby GC Rieber Shipping shall own minimum 50.1 %, or
minimum 34 % if listed on an exchange. Further, Arrow shall ultimately own 100 % of ASI IV. If Arrow is not
listed, it may not pay dividends in excess of 50% of yearly net result, unless the outstanding balance under the
loan agreement is reduced correspondingly.
9.5.3 Key figures for 2006
Draw downs under above term loan in 2006 was USD 34.4 million and relates to the conversion of the “Geo
Atlantic” and purchase of the “CGG Laurentian”. Repayments of USD 3.9 million were made on above
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