Prosafe agreement with Cosco sees major financial transformation

Cyprus-headquartered accomodation vessel owner Prosafe has reached an agreement with Cosco allowing for the flexible delivery of three previously stalled newbuild accomodation vessels, which have allowed the company to come to an agreement with its lenders to amend loan facilities to improve the company’s financial position.

Prosafe and Cosco signed an agreement allowing for the flexible delivery and long-term financing of newbuilds Safe Eurus, Safe Nova and Safe Vega. The agreement allows for flexible delivery of the vessels over a period of up to five years in addition to a $55m discount on the total contract price. Cosco has also provided long-tern financing of up to $431m amongst other concessions.

“The agreement provides a very attractive solution for both Prosafe and Cosco. Prosafe achieves commercial flexibility to take the units to market as opportunities materialise in the years ahead, whilst Cosco secures a delivery gateway for its key semi-submersible accommodation new builds via a leading accommodation vessel operator,” Prosafe said in a statement.

Prosafe says the flexibility of the new agreement has helped it negotiate with lenders certain amendments of its loan facilities to significantly improve its financial position. The agreement includes an extended runway by way of continued reduced amortization and one year maturity extension option to its main $1.3bn credit facility as well as continued covenant ease for its loan facilities. It also provides the flexibility to scrap up to three existing Prosafe vessels which are currently collateral under the relevant loan facilities without repayment of the corresponding collateral value to lenders.

Jesper Kragh Andresen, CEO of Prosafe, commented: “The agreement with Cosco combined with the flexibility to possibly scrap up to another three legacy vessels will significantly change our fleet profile. Prosafe will be able to attain a modern and competitive fleet with future earnings potential for the long term. The agreement with our lenders includes improved financing terms and implies an extended financial runway as well as the ability to finance the staged delivery of the three vessels from existing cash and cash-flow from operations. The combination of the agreement with Cosco and the agreement with our lenders is expected to create value for all stakeholders.”