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Viking Supply still at odds with its bondholders

A month ago, Viking Supply Ships (VSS) said its restructuring would be completed “within the foreseeable future”, but the Oslo-listed company seems to have spoken too soon and has still to reach an agreement with its bondholders.

“Should a solution not be reached the only realistic outcome is bankruptcy of VSS,” the company said in a filing today.

VSS today said discussions “have been quite challenging” with a committee of three core holders in the bond issue ‘Viking Supply Ships A/S 2012-17 FRN’.

The bondholders are only willing to discuss a solution where where the bonds are redeemed in cash at a somewhat discounted price, VSS said.

“If the bondholders do not move from this position, it will not be possible to arrive at a restructuring which will allow VSS to survive as a going concern,” the company stated.

VSS’ secured creditors have demanded a deferral of the maturity of the bonds, and that part of the interest payments be made in-kind as part of the restructuring of the group’s global balance sheet, which VSS considers to be “a fair and attractive offer”.

“This offer has, however, on several occasions been flatly rejected by the above-mentioned committee of bondholders,” the company said.

An alternative solution could be to convert the bonds into shares in Viking Supply Ships AB, which is listed on the Small Cap segment of the NASDAQ OMX Stockholm exchange.

The bonds would be converted at present market values, respectively 36% of par value and SEK 1.70 per share. The shares may be sold by the recipients but cannot be redeemed for cash, VSS said.

A new restructuring proposal will be presented to to the holders of the bond at an upcoming meeting.

The Swedish company has been in discussions with its lenders during the past months. On May 2, it entered into an agreement in principle with its banks after finding itself unable to fulfill the existing covenants of its loan agreements.

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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