Solstad Offshore has retrospectively booked an impairment of NOK850m ($99.28m) on the value of its fleet in the third quarter of 2018.
When releasing its original third quarter results, Solstad considered it unnecessary to carry out an impairment test on its fleet value, as it matched independent broker valuations. However, the company was questioned by Norwegian financial supervisory authority, Finanstilsynet, on the matter last month, believing it did not give enough weight to the issue.
After carrying out the impairment test, Solstad has booked the NOK850m impairment citing the delay in the market recovery and an increase in the company’s cost of capital.
Solstad went further to say that there is a risk of further write-downs being made in its fourth quarter accounts for 2018.
Last month Solstad Offshore secured a suspension of both principal and interest payments with its lenders, having commenced restructuring efforts in October 2018.