Arrow Prospectus - PGS

ARROW SEISMIC ASA – INITIAL PUBLIC OFFERING
mortgage loans in 2006. Average interest-bearing debt during 2006 was USD 40.4 million and the average rate
of interest payable on the loan portfolio was 6.02%. The Group’s long-term liabilities broke down as follows at
the end of 2006:
Table 9-2: Long-term liabilities
31 Dec. 31 Dec.
Effective interest rate Maturity
2006 2005
Mortgage loan Arrow Seismic Invest I Ltd. USD LIBOR + 0.90 % 11/2015 52,908 35,200
Mortgage loan Arrow Seismic Invest IV Ltd. USD LIBOR + 0.90 % 9/2011 12,825
Total long-term liabilities 65,733 35,200
The instalment scheme for Arrow (group)’s long-term liabilities at the end of 2006 was as follows:
Table 9-3: Instalment scheme
First year’s instalments on long-term loans are classified as current liabilities in the balance sheet.
9.5.4 Six month NOK 275 million unsecured 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% p.a. and matures on 16 October 2007. The loan was arranged by DnB NOR Bank ASA.
9.5.5 New USD 125 million secured term loan facility
ASI IV has entered into a loan agreement with DnB NOR Bank ASA for a USD 125 million secured facility.
The purpose of the facility will be to refinance the vessel “CGG Laurentian” and part financing of the purchases
and planned conversions of the three 2D/source vessels. USD 15 million of the facility is subject to satisfactory
employment of “Polar Explorer”, “Polar Pearl” and “Polar Sea”.
The facility will be secured with first priority mortgages in the vessels “CGG Laurentian”, “Polar Explorer”,
“Polar Pearl” and “Polar Sea”, as well as security rights over earnings and insurances, factoring agreement, and
in the pre-delivery period, refund guarantees, a general pledge. In addition the loan will be secured by a parent
company guarantee provided by Arrow.
The facility has a margin of 0.70% - 0.80 % over USD LIBOR, pending on charter period of the vessels.
The USD 125 million facility will have a term of between five to seven years with and semi annually repayments
(when fully drawn) of USD 7,437,500 for the first 5 years, and USD 5,937,500 in semi annual repayments for
the last 3 years. In addition the employment tranche of USD 15 million shall be repaid over the actual charter
period.
The key financial covenants are as follows.
(i)
(ii)
Arrow (group)
Maturity in 2007 7,844
Maturity in 2008 7,844
Maturity in 2009 7,844
Maturity in 2010 7,844
Maturity later 34,357
Total long-term liabilities 65,733
Arrow’s consolidated ratio of book equity to total assets shall be a minimum 30 per cent
Arrow’s consolidated working capital shall at all times be positive meaning that current assets less
current liabilities (less current portion of long term debt) shall always be positive
(iii) Arrow’s consolidated minimum free and available cash shall at minimum be equal to next 12
months consolidated instalments of long term debt (excluding balloon payments due within one
year)
The term loan contains a change of control clause, whereby GC Rieber Shipping shall own minimum 50.1 %, or
minimum 33.34 % if listed on an exchange. Further, Arrow shall ultimately own 100 % of ASI IV. If Arrow is
not listed, it may not pay out dividends in excess of 50% of the yearly net result, unless the loan is reduced with
an amount equivalent to the amount in excess of 50% of the yearly net result of dividend paid out.
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