Tristan Oil Ltd. (Tristan), the issuer of 10 ½ per cent senior
secured notes due January 1, 2012 in the aggregate principal amount of
US$531,110,000 (the Notes) announces that on December 17, 2012,
it entered into an agreement (the Sharing Agreement) with holders
of Notes holding 64.25% of the aggregate principal amount of Notes (the Majority
Noteholders). Subsequently, additional holders of Notes have adhered
to the Sharing Agreement (together with the Majority Noteholders, the Participating
Noteholders) such that, as at today’s date, Participating
Noteholders holding in excess of 88.5% of the aggregate principal amount
of the Notes are parties to the Sharing Agreement.
Parties associated with Tristan, including its shareholder Anatolie
Stati, along with Gabriel Stati, Ascom Group S.A. and Terra Raf Trans
Traiding Ltd. (the Claimant Parties), have initiated an
arbitration against the Republic of Kazakhstan seeking substantial
damages for the alleged expropriation of certain of the Claimant
Parties’ interests in Kazpolmunay LLP and Tolkynneftegaz LLP, the
Guarantors under the Notes, as well as certain other assets of the
Guarantors (the Arbitration).
The Claimant Parties contend that as a result of these actions by the
Republic of Kazakhstan, Tristan failed to pay interest on the Notes on
July 1, 2010. That failure subsequently became an Event of Default and
additional Events of Default under the Notes have occurred and are
continuing as a result of the Notes having matured and the failure of
Tristan or the Guarantors to make payment thereon.
Summary Description of Sharing Agreement:
Under the Sharing Agreement:
Any proceeds collected as a result of an award or settlement of the
Arbitration (an Award) will be paid into a blocked account in
The Proceeds will be shared between the Claimant Parties and the
Participating Noteholders; once certain costs have been paid, the
Participating Noteholders will receive 70% of any such proceeds until
principal and interest on their Notes have been repaid in full.
Interest will accrue under the Notes after January 1, 2012 at the rate
of interest, if any, provided in the Award.
The Claimant Parties have granted to the Participating Noteholders a
collateral assignment over the product and proceeds of the Arbitration
as security for their obligations under the Sharing Agreement.
The Participating Noteholders have agreed to extend the maturity of
their Notes until January 1, 2016, although the Participating
Noteholders have retained the right to take enforcement action against
the original guarantors of the Notes after January 1, 2014.
The Participating Noteholders have agreed that, in the event that they
recover any proceeds from enforcement action against the guarantors of
the notes, they will, in certain circumstances, share these with the
Claimant Parties applying the same formula that will apply in relation
to the proceeds of an Award.
If the Participating Noteholders recover a “Minimum Payment” (being
approximately 70% of what they are owed in respect of the Notes) and
certain conditions have been satisfied, Tristan will be entitled to
redeem their Notes for US$1.00. In the event that the Participating
Noteholders recover less than this amount they will retain their
rights to take enforcement action under the Notes in respect of the
amounts they are still owed.
The Consent Solicitation and the Pre-Packaged Bankruptcy:
The benefits of the Sharing Agreement are to be made available to all
holders of Notes by way of a consent solicitation (the Consent
Solicitation) which will amend the terms of the Notes, including
those changes as set out above. Following the Consent Solicitation, the
Notes held by Participating Noteholders will cease to be in default and
the Participating Noteholders will forbear from seeking any remedies
with respect to the Notes until January 1, 2014 unless other material
defaults under the Sharing Agreement or the Notes occur prior thereto.
The Consent Solicitation is expected to be launched during the month of
The Participating Noteholders have agreed to vote in favour of the
Consent Solicitation and have agreed that they will only sell their
Notes to parties which adhere to the terms of the Sharing Agreement and
vote in favour of the Consent Solicitation.
In the event that Noteholders holding 85% in aggregate principal amount
of the Notes do not vote in favour of the Consent Solicitation, Tristan
will seek to implement the restructuring by way of a pre-packaged
Chapter 11 bankruptcy filing in the United States Bankruptcy Court for
the Southern District of New York (the Bankruptcy). The
Participating Noteholders have also agreed to vote in favour of any such
bankruptcy plan to give effect to the Sharing Agreement.
For further information contact Mr. Artur Lungu, CFO, at firstname.lastname@example.org
or tel.: +37369602130