Fearnley Offshore Supply has put forth a depressing outlook for the OSV sector in a just published report.
“As clearly forecasted 2016 became the worst year for offshore service vessels we have seen since the mid-1980s, and unfortunately, it will only get worse during 2017 before it, hopefully, gets any better,” the Norwegian broker noted, adding: “More or less all OSV owners are going through some form of restructuring/forced marriage/refinancing/ bankruptcy/cutbacks/lay-off of people, or whatever description one might want to use. The reality of the situation is that the debt structure for most of these companies is almost impossible to handle as it stands.”
Putting a positive spin on the coming 12 months, Fearnley did suggest that 2017 could be a year of opportunities.
“Today you can pick up vessels that are only a few years old for 15-30% percent of cost price,” the report pointed out.
Nevertheless, many will feel pain, not least OSV bondholders, who Fearnly said, have and will continue to “take a beating” in addition to the fact that the equity is “almost blown away” within a lot of these companies.