Floatel lands three new deals, reaches agreement with lenders

Offshore accommodation provider Floatel International has secured three new contracts in Norway and reached an agreement with its lenders, which will enable it to retain the Floatel Endurance in its fleet.

Floatel said in a statement on Sunday it has been awarded three contracts on the Norwegian continental shelf.

The first contract is with Vår Energi for a period of three months set to begin in June 2021. The contract also includes options.

Furthermore, Floatel has secured two contracts with Equinor for execution in 2022.

One of the contracts is for the Breidablikk project with a start date in April 2022 for a period of four to six months.

The second Equinor contract is for the Johan Sverdrup Phase II project. The start date for this job is also around April 2022 for a period of five to eight months.

Floatel’s offshore accommodation vessels to be used for these contract have yet to be nominated.

After months of talks, Floatel informed on Saturday that the constructive discussions with lenders have concluded with an agreement that will deliver full discharge of security over the Bank Vessel Assets.

The Collateral Discharge Agreement has the approval of a significant majority of the company’s shareholders and the bondholders that are party to the Lock-Up Agreement.

Floatel noted that the completion of the Collateral Discharge Agreement is conditioned upon securing and satisfying all conditions precedent to the New RCF, which will be drawn in part to fund a settlement payment of $46 million to the lenders under the Collateral Discharge Agreement.

Upon completion of the Collateral Discharge Agreement, which is envisaged to occur in February 2021, the vessel Floatel Endurance will remain with the group, cash in the blocked accounts and other assets retained by the relevant group company and any and all claims of the lenders against the group including the $115 million owed in principal, interest and fees under the Bank Vessel Facility and the RCFs will be fully and unconditionally released.

There are a number of other steps to be taken to complete the transaction, but certain of these steps are simplified as a result of the agreement with the lenders. In particular, the scheme that had been considered to manage the Common Collateral claims will no longer be required.

The Collateral Discharge Agreement, and the transaction generally, will be for the benefit and security of all stakeholders including current and future customers, suppliers, offshore and onshore personnel as well as shareholders and secured financial creditors.

As before, those vessels that are on charter, including Floatel Endurance currently at the Martin Linge field can continue to operate as normal.

Retaining the Floatel Endurance further enhances the ability to sign and deliver new assignments as well as secure the future of the business, the company concluded.