Viking Supply Ships taken to bankruptcy court over vessel debt

Norseman Offshore, a single purpose company, has filed an application for bankruptcy against the shipping company Viking Supply Ships (VSS) with the Maritime and Commercial High Court in Copenhagen. 

VSS said in a statement on Friday it has not yet been officially notified of the petition by the Court.

Norseman Offshore is the owner of the anchor handling tug supply (AHTS) vessel Odin Viking which is on a bareboat charter with VSS. The pair entered into a sale and leaseback transaction for the 2003-built AHTS vessel in December 2012 and in the transaction the vessel was priced at $52.85 million. The bareboat agreement was set for 8 years.

VSS explained that the petition for bankruptcy was made on the basis of unpaid hire in an aggregate amount of approximately $2.5 million. According to VSS, the parties have been in discussions for several months as part of the overall financial restructuring of the group.

In a statement on Friday, the shipping company said: “VSS is of the view that there is no basis for the petition and will vigorously defend itself against it.”

To remind, the Odin Viking was laid up back in November 2015 due to poor market conditions within the conventional AHTS market. The situation was no different when it comes to the platform supply vessel market and Viking Supply Ships laid up its two remaining active PSVs in March 2016.

VSS is currently in the process of restructuring its debts. The company recently said in its 2015 annual report it has agreed the main principles for a restructuring agreement with the bank lenders.

Execution of a final agreement in the form of a term sheet was pending certain conditions precedent, including that an amended agreement was negotiated and agreed with the bondholders in the senior unsecured bond in Viking Supply Ships and that terms for the bareboat charter of Odin Viking are re-negotiated and amended. The agreement was not signed as these conditions remained unresolved.

The debt restructuring is aimed at improving VSS’ balance sheet and reducing the amount needed for debt service until January 1, 2020.

Viking Supply Ships’ total revenue for the year 2015 amounted to NOK 1,069 million, compared to NOK 1,741 million in 2014. The company’s net loss was NOK 338 million, compared to a profit of NOK 292 million in 2014.

Offshore Energy Today Staff