Solstad Offshore, the Norwegian offshore vessel owning giant formed by the merger of Solstad Offshore, Deep Sea Supply and Farstad, says the large majority of its stakeholders have agreed a restructuring which has been under negotiation since the third quarter of 2018.
The company said secured lenders, leasing companies, industrial shareholders and key bondholders have established a common plan to finalise negotiations on a restructuring to the benefit of all stakeholders, with a binding agreement expected to be signed by the end of the month.
“Passing this milestone means that we continue to operate Solstad Offshore ASA in a controlled manner in these challenging times, with predictability for our employees and clients word-wide. The discussions with the stakeholders are constructive and we look forward to work with the parties with a view to agree on the restructuring over the next weeks,” said Lars Peder Solstad, CEO of Solstad Offshore.
The restructuring outline will see around NOK10bn ($960m) of debt converted to equity, a simplified company structure, and the trimming of its fleet to a core of 90 vessels with 37 older vessels set to be sold or scrapped.
Upon completion of the restructuring, the existing shares will represent 0.4%, and the converted debt will represent at least 65-75% of the company’s shares. Existing industrial shareholders, including Lars Peder Solstad and companies controlled by him, will continue to support the company and will be offered to subscribe for shares in order to retain an ownership of up to one third of the shares in the company upon completion of the restructuring.
“We are entering a period where global offshore activity is likely to be reduced with the impact of the Covid-19 virus and drop in the oilprice. A successful implementation of the restructuring will enable the company to better meet the challenges of the current markets and position the company well for the coming years,” Solstad said.