Petroamazonas EP Announces Commencement of Consent Solicitation

QUITO, Ecuador, April 28, 2020 /PRNewswire/ -- Empresa Pública de Exploración y Explotación de Hidrocarburos Petroamazonas EP ("Petroamazonas" or the "Company") announced today that it has commenced a solicitation of consents (the "Consent Solicitation") seeking to amend its 4.625% Notes Due 2020 (the "Securities"), unconditionally and irrevocably guaranteed by the Republic of Ecuador ("Ecuador" or the "Republic"), and the indenture governing the Securities.

The Securities were originally issued on November 6, 2017 in an aggregate principal amount of U.S.$300,000,000. As a result of scheduled amortization, as of the date of the Consent Solicitation Statement, U.S.$175,000,000 aggregate principal amount of the Securities remain outstanding (the "Outstanding Principal Amount").

A group of institutional investors represented by White & Case LLP holding approximately 60% of the outstanding principal amount of the Securities has expressed to the Republic their intention to support the Proposed Amendments (as defined below) on the terms and conditions detailed in the consent solicitation statement dated April 28, 2020 (the "Consent Solicitation Statement").

The purpose of the Proposed Amendments is to adapt the amortization schedule of the Securities, by extending the maturity and deferring the payment of principal and interest, and thus enable the Company and the Republic to meet the payment obligations on a basis that would be consistent with the steps the Republic continues to implement to address medium- and long-term financial commitments and render its outstanding debt obligations sustainable.

If approved, the proposed amendments (the "Proposed Amendments") will give effect to the following modifications with respect to the Securities:

• extend the maturity date of the Securities from November 6, 2020 to December 6, 2021;

• establish a new amortization schedule for the Securities beginning on January 6, 2021 as follows:

• eliminate interest payment dates prior to September 6, 2020.  For the avoidance of doubt, interest shall continue to accrue on the Outstanding Principal Amount from the date of the last interest payment date on April 6, 2020 and be due and payable on September 6, 2020 (the date on which interest on the Outstanding Principal Amount accrued from (and including) April 6, 2020 through (but excluding) September 6, 2020 will be due and payable).  Interest will be payable monthly thereafter;

• reduce the interest amount due on the Securities now scheduled for September 6, 2020 by US$0.50 for each US$1,000 of the Outstanding Principal Amount, irrespective of whether all affected holders participated in the Consent Solicitation;

• exclude from the Events of Default set forth in the Securities cross defaults arising from defaults under, and defaults arising from the entering or issuance of judgments and arbitral awards relating to:

• each series of the Republic's 10.750% Notes due 2022, 8.750% Notes due 2023, 7.950% Notes due 2024, 7.875% Notes due 2025, 9.650% Notes due 2026, 9.625% Notes due 2027, 8.875% Notes due 2027, 7.875% Notes due 2028, 10.750% Notes due 2029, 9.500% Notes due 2030 and 7.25% Social Housing Notes due 2035, in each case outstanding as of the date of the Supplemental Indenture (the "Excluded Republic Bonds"); unless and until such series of Excluded Republic Bonds is amended after the date of the Supplemental Indenture with respect to any Reserved Matter (as defined in the relevant indenture) or any crossdefault provision in accordance with a definitive consent solicitation transaction reflecting the Republic's debt reprofiling plans. For the avoidance of doubt, any series of Excluded Republic Bonds that is not amended by Ecuador pursuant to such a consent solicitation will continue to be excluded from the cross default provision in the Securities. Conversely, any series of Excluded Republic Bonds amended by Ecuador pursuant to such a consent solicitation will again be considered External Indebtedness subject to the cross default provision in the Securities; and

• any other External Indebtedness consisting of loans from creditors other than multilateral creditors in a principal amount that does not exceed U.S.$300,000,000 in the aggregate.

No record date has been set for this Consent Solicitation. Accordingly, Securities with respect to which consents are given in the Consent Solicitation will be blocked from transfer in the applicable clearing system until the earlier of the date on which the Consent Payment (as defined below) is paid and the time at which the Consent Solicitation is terminated. The Consent Solicitation is being made on the terms and subject to the conditions set out in the Consent Solicitation Statement. The Company will pay to holders a fee (the "Consent Payment") to each holder in an amount equal to U.S.$0.50 for each U.S.$1,000 of Outstanding Principal Amount of Securities to holders of Securities whose validly delivered consent is accepted pursuant to the Consent Solicitation Statement if the Proposed Amendments become effective. Holders that do not deliver valid consents will not receive the Consent Payment even if the Securities are amended. Holders that deliver valid Consents which are accepted by the Company will not receive a Consent Payment if the Securities are not amended.

Identifiers for the Securities consist of ISIN Nos. XS1734077420 and XS1734077693, and Common Codes 173407742 and 173407769.

The Company's proposed amendments will become effective only if valid consents from holders of not less than 75% of the Outstanding principal amount of Securities have been validly delivered and accepted pursuant to the terms of the Consent Solicitation, and the other conditions described in the Consent Solicitation Statement, have been either satisfied or waived by the Company.

Petroamazonas reserves the right in its sole discretion to reject any and all consents. The Company also reserves the right to waive or modify any term of, or terminate, the Consent Solicitation at any time and in its sole discretion.

The Expiration Time for the Consent Solicitation is 5:00 p.m., Central European Summer Time (11:00 a.m., New York City time), on May 4, 2020 (as such time may be extended by Petroamazonas EP in its sole discretion, the "Expiration Date"). Petroamazonas EP may terminate the Consent Solicitation at any time in its sole discretion. Capitalized terms not defined in this communication have the meanings specified in the Consent Solicitation Statement.

This announcement is for informational purposes only and is not a solicitation of consents of any holders of Securities. The solicitation of consents of holders is only being made pursuant to the Consent Solicitation Statement. Holders of Securities should read the Consent Solicitation Statement carefully prior to making any decision with respect to providing its consent because it contains important information.

The Company will make (or cause to be made) all announcements regarding the Consent Solicitation by press release in accordance with applicable law.

The Company has not registered the Consent Solicitation or the Securities under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities law. The consent may not be solicited in the United States or to any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Consents are being solicited only (1) of holders of the Securities that are "qualified institutional buyers" as defined in Rule 144A under the Securities Act ("QIBs") and (2) outside the United States, of holders of Securities other than "U.S. persons" (as defined in Rule 902 under the Securities Act) and who are not consenting for the account or benefit of a U.S. person, in offshore transactions in compliance with Regulation S under the Securities Act.  Only holders of Securities who have returned a duly completed eligibility letter (available on the website of the Information and Tabulation Agent, at https://gbsc-usa.com/eligibility/petroamazonas) certifying that they are within one of the categories described in the immediately preceding sentence are authorized to receive and review the Consent Solicitation Statement and to participate in the Consent Solicitation.

Citigroup Global Markets Inc. is the Consent Solicitation Agent in connection with the Consent Solicitation. Global Bondholder Services Corporation is the Information and Tabulation Agent in connection with the Consent Solicitation. Lazard Frères is acting as Financial Advisor to Ecuador in connection with the Consent Solicitation.

NONE OF THE CONSENT SOLICITATION AGENT, THE TRUSTEE, THE INFORMATION AND TABULATION AGENT, THE FINANCIAL ADVISOR NOR ANY OF THEIR RESPECTIVE DIRECTORS, EMPLOYEES, AFFILIATES, AGENTS OR REPRESENTATIVES MAKES ANY RECOMMENDATION AS TO WHETHER HOLDERS SHOULD DELIVER CONSENTS TO THE PROPOSED AMENDMENTS PURSUANT TO THE CONSENT SOLICITATION, AND NO ONE HAS BEEN AUTHORIZED BY ANY OF THEM TO MAKE SUCH A RECOMMENDATION. EACH HOLDER MUST MAKE ITS OWN DECISION AS TO WHETHER TO GIVE A CONSENT.

The Consent Solicitation Statement will be available from the Information and Tabulation Agent.

The Information and Tabulation Agent for the Consent Solicitation is:

Global Bondholder Services Corporation
65 Broadway – Suite 404
New York, New York 10006
Attn: Corporate Actions
Banks and Brokers call: (212) 430-3774
Toll free (866)-470-3800
By facsimile:
(For Eligible Institutions only):
(212) 430-3775/3779
Confirmation:
(212) 430-3774
Email: [email protected]

Any questions regarding the terms of the Consent Solicitation should be directed to the Consent Solicitation Agent or the Information and Tabulation Agent at their respective addresses and telephone numbers set forth on this communication. If you have any questions about how to deliver a consent in the Consent Solicitation, you should contact the Information and Tabulation Agent. Requests for additional copies of the Consent Solicitation Statement, the eligibility letter or any other related documents may also be directed to the Information and Tabulation Agent.

The Consent Solicitation Agent for the Consent Solicitation is:

Citigroup Global Markets Inc.
388 Greenwich Street, 7th Floor
New York, New York 10013
Attn: Liability Management Group
Toll Free:+1-800-558-3745
Collect: +1-212- 723-6106

The Republic of Ecuador
Ministry of Economy and Finance Av. Amazonas entre Pereira y Unión Nacional de Periodistas
Plataforma Gubernamental de Gestión Financiera, Pisos 10 y 11 Quito, Ecuador

(Financial Advisor to the Republic of Ecuador)

Lazard Frères
121 Boulevard Haussmann
75008, Paris

SOURCE Empresa Pública de Exploración y Explotación de Hidrocarburos Petroamazonas EP