Oslo-listed Viking Supply has called a meeting to propose a standstill agreement that would stay its financial obligations to bondholders until April 13, while it tries to improve its liquidity.
The agreement relates to investors in Viking’s senior unsecured open bond issue 2012/2017, for which the next interest payment was due on March 21.
The March 21 payment will be made on Wednesday and will be partly paid with NOK 3.6m ($430,000) in cash and with NOK 5.57m ($660,000) in newly issued bonds.
Bondholders will decide whether to effect the proposed standstill agreement at a meeting to be held on April 8.
Viking has extended the standstill agreement it has with its banks until April 13, from March 20 previously. The proposed agreement with its bondholders will be conditional upon the standstill remaining in force with Viking’s senior secured lenders.
“The company’s liquidity position is strained and in the current market the earnings potential does not match the financial obligations, including the amortisation schedule. Furthermore, despite a positive operating result, the company is unable to fulfill existing covenant undertakings in its loan agreements,” Viking said in a release today.
It added that it is working with its lenders to find a “long-term solution” to its liquidity problems.