Dubai-headquartered seismic shipowner Polarcus has halted all payment of interest and amortisation to its lenders after confirming a payment default under its working capital facility.
Polarcus explained that in light of the sustained economic challenges globally, the company had been in discussions with lenders and managed to have an extension of the company’s bank facilities until January 25, including an obligation to clean down $25m drawn down from a working capital facility agreement. The lenders have now informed Polarcus that no further extension will be granted, and so with the expiration of the clean down extension, an event of default has been triggered.
While the company says it will continue to work with its lenders, subsequently it revealed that its lenders have enforced share pledges over the company’s shipowning subsidiaries. The lenders have transferred all issued shares in each subsidiary to a company controlled by the lenders.
“The Lenders have made it clear to the Company that their intention is not to jeopardise or destabilize the Polarcus organization. The Lenders have intentionally not made any demand for payment from guarantors of the Facility Agreements (including the Company) nor have the Lenders sought to enforce any other collateral which they hold (though the Lenders reserve their rights to do so). The Lenders have confirmed that they are open to entering into a standstill period which will allow continued operations and awarded projects to be undertaken without disruption and discussions are underway in this regard,” Polarcus stated.
Polarcus says that the company will continue to operate normally in the interests of its stakeholders, and all trade creditors will continue to be paid in full and clients will continue to receive the high project performance standards.