Singapore-based offshore vessel operator Pacific Radiance has come up with a debt restructuring plan, which would see the Mexican offshore support vessel owner and operator E-NAV Offshore take over the vessels mortgaged to its lenders.
The restructuring plan is said to have the support of major lenders and allows the group to dispose of almost its entire fleet of vessels to a single buyer rather than on a break-up basis, and to continue to carry on business thereafter.
As part of the agreement, E-NAV will purchase the vessels owned by Pacific Radiance and take care of part of the secured debt presently owed to the lenders. E-NAV will also appoint Pacific Radiance as ship managers for the majority of the acquired vessels via ship management contracts.
The vessels and accompanying income and revenue streams from the group will be transferred to one or more special-purpose companies, majority-owned by E-NAV.
The restructuring of the Pacific Radiance balance sheet will also involve the restructuring of the remaining debt obligations owed to the lenders and other creditors via court-sanctioned schemes of arrangement and debt restructuring agreements.
The company said it will submit the plan to the High Court of Singapore as soon as possible.
Pacific Radiance has in recent years carried out extensive investor searches and undertaken concerted negotiations with a number of them and it now believes that it has exhausted all options.
“Given the continuing uncertain external conditions and the state of the industry in which the group operates, compounded by the Covid-19 pandemic which hurt investor sentiment severely, it is unlikely that an alternative proposal to the current one offered by E-NAV will emerge,” the company said.
Following completion of the debt restructuring plan, the group believes it could be viable as a going concern. It intends to transition to an asset-light ship management business in the near future, beginning with the management of the sold vessels.