Wintermar, lenders in debt deal

Indonesia’s offshore vessel owner PT Wintermar Offshore Marine has agreed with lenders to delay debt payment, citing tough market conditions as the reason.

The company running a fleet of 70 offshore vessels said on Tuesday that a number of its subsidiaries has completed loan rescheduling agreements with key lenders. Loan periods and principal repayments have been amended to more closely align these debt service obligations with cash generated, the company said.

“The Group considered this process necessary in view of the lower outlook on vessel utilization and charter rates following the sustained impact of lower oil prices globally and the reduction in spending by its major clients in the oil and gas extraction industry,” Wintermar said.

Amendments to outstanding bank debt of $71.4 million have been agreed with the Group’s major lenders, representing 93% of long term bank debt outstanding at 31 December 2016. A total of $31.7 million of loan principal due in 2017 and 2018 has been rescheduled to become due in 2018 to 2022. The agreements are subject to completion of certain matters by no later than June 15, 2017.

Wintermar on April 28 reported drop in 1Q revenue, citing the lagged effect of depressed oil prices in 2016.

Overall revenue fell by 44% year-on-year to $13.1 million compared to $23.3 million in 1Q 2016. This was caused by the lagged effect of the near standstill in tendering activity experienced in the second half of 2016, which resulted in lower charter rates at the same time as the utilization rate dipped below 50%.

The company then said that while sentiment in the oil industry seems to have bottomed and tendering activity has picked up in 2017, the OSV sector lags the oil price by 6-9 months.