Malaysian shipbuilder Nam Cheong has become the latest offshore shipyard to seek restructuring, amid the continued depression in the offshore industry.
The company said it has taken steps to review its options to restructure its businesses, operations and balance to preserve value for stakeholders of the company, in light of the severe and protracted downturn in the global oil and gas industry.
According to a statement made by Nam Cheong, the company and its advisers are holding discussions with its principal lenders to address significant debt maturities and are in the midst of carrying out a review of the cash flow projections and costs cutting measures.
The company said it is now focused on stepping up efforts to improve its financial position whilst continuing its cost rationalisation measures to improve overall competitiveness.
So far no definitive agreements in relation to restructuring have been entered by the shipyard and the company said it would be faced with a going concern issue if the restructuring is not favorably completed in a timely manner.
In March, the shipyard announced that its auditors have cast doubt on its ability to survive.
According to VesselsValue, there are currently 456 OSVs on order throughout the world, 450 of these set be delivered in 2017. Nam Cheong currently has 56 vessels scheduled for delivery this year, far more than any other shipbuilder, and Splash understands that only a small percentage have been committed for sale.