Atlantica Tender Drilling : ATDL) – Recovery Agreement

Bermuda, 02 September 2021 - The board of Atlantica Tender Drilling Ltd. ("ATDL") is pleased to announce that an agreement has been reached with ATDL's two main creditor groups, i.e. (i) the lending syndicate under its senior bank facility (the "Senior Lenders") and (ii) its bondholders represented by Nordic Trustee ASA (the "Bondholders") allowing for the solvent winding up of ATDL and its subsidiaries (the "Group").

ATDL's obligation to repay the amounts it currently owes to the Senior Lenders (the "Senior Debt") and the Bondholders (the "Bond Debt") are secured by mortgages over the two tender drilling rigs, "Atlantica Delta" and "BassDrill Beta" owned by subsidiaries of ATDL (the "Rigs"). The aggregate of the Senior Debt and the Bond Debt far exceeds the value of the current assets of ATDL.

Neither of the Rigs are currently employed. "Atlantica Delta" is warm stacked in Las Palmas while "BassDrill Beta" is under tow in international waters in the South Atlantic having recently demobilized from its contract with Petrobras in Brazil. The board of ATDL has concluded that the likelihood of securing new employment for the Rigs in the short to medium term is low. It is therefore not possible for ATDL to service its debt going forward.

The agreement reached between ATDL, the Senior Lenders and the Bondholders (the "Recovery Agreement") allows for the sale of both Rigs in the short term followed by the winding up of ATDL's subsidiaries and, once this is completed, the winding up of ATDL itself.

The Recovery Agreement is attached hereto together with the notice to bondholders. Its key terms are:

(a) The maturity dates for the Senior Debt and the Bond Debt are extended to 31 December 2024 and 31 January 2025, respectively. It is expected that the winding up of the Group will be concluded by these dates.

(b) The Senior Lenders and the Bondholders undertake, with certain limited exceptions, not to declare a default and/or take actions against ATDL and/or any of its subsidiaries prior to the earlier of (i) the date the sale of both Rigs have been completed and (ii) 30 September 2021 or such later date as may be agreed between the Company, the Senior Lenders and the Bondholders.

(c) The net proceeds from the sale of the Rigs shall be shared on a 50:50 basis between the Senior Lenders and the Bondholders.

(d) On receipt of the net proceeds from the sale of the Rigs the Senior Lenders and the Bondholders shall waive (i) their respective right to accelerate the Senior Debt and the Bond Debt based on existing events of default and (ii) future rights regarding repayment of principal (save for such amounts as will be distributed to them pursuant to the terms of the Recovery Agreement), interest and covenants under the terms of the Senior Debt and the Bond Debt.

(e) It is acknowledged that the appropriation of the USD 28,000,000 of ATDL's liquidity swept by the Senior Lenders earlier this year was done in compliance with existing agreements. The Senior Lenders shall furthermore, upon the execution of the Recovery Agreement, be entitled to appropriate another USD 2,000,000 of ATDL's liquidity which are held in a blocked account in their favour today.

(f) The current cash position of ATDL shall be used to finance the winding up of its subsidiaries, payment of trade creditors of the Group and the winding up of ATDL itself.

(g) Any part of the cash held by the Group today which exceeds what is needed to finance the winding up of the subsidiaries and ATDL will be shared on a 50:50 basis between the Senior Lenders and the Bond Trustee as set out in more detail in the Recovery Agreement. When the winding up of ATDL is completed, the Senior Lenders and the Bondholders will write off their remaining claims.

(h) The Recovery Agreement includes provisions pursuant to which it may be terminated by the Senior Lenders and/or the Bondholders in certain circumstances. There are, in such event, mechanisms protecting payment to remaining trade creditors.
The Recovery Agreement has been approved by the Senior Lenders.

A notice for a written resolution of the Bondholders approving the Recovery Agreement has been issued on the date hereof and is attached. A majority of the Bondholders (approximately 75%) has confirmed that they support the resolution. The resolution will therefore be passed.

ATDL's majority shareholder has furthermore agreed to support the conclusion of the Recovery Agreement. A notice requesting the support of the shareholders by way of a written resolution will be issued, and a copy of the proposed written resolution is attached. Given the number of votes held by the majority shareholder (69%), this resolution will be passed.

Based on the terms of the Recovery Agreement, no recovery to shareholders can be expected.

The board of ATDL is grateful to the Senior Lenders and the Bondholders for their support. The implementation of the Recovery Agreement will ensure that trade creditors are paid and that a costly and time-consuming bankruptcy process is avoided.

For further information, please contact:
Reese McNeel
CFO
Atlantica Tender Drilling Ltd.
[phone]
[e-mail]

http://www.atlanticatd.com/wp-content/uploads/2021/09/NO0010675580_summons-for-a-WR_02092021.pdf

http://www.atlanticatd.com/wp-content/uploads/2021/09/ATDL-Shareholder-Written-Resolution-Aug-2.pdf