Fred. Olsen Energy restructuring plans hampered by potential rig buyer exit

Offshore driller Fred. Olsen Energy (FOE) is considering other restructuring alternatives or it might be facing bankruptcy following a withdrawal of a potential buyer for its drillship Bolette Dolphin.

To remind, as part of its ongoing refinancing efforts, FOE in early November presented to its stakeholders a proposal for the refinancing of its capital structure.

Key elements of the proposal included the sale of the company’s drilling unit Bolette Dolphin, the issuance of new equity in the amount of approximately $130-140 million in consideration of approximately 89% of FOE’s share capital, post refinancing, and the issuance of new loan capital in the amount of approximately $90 million.

Last Thursday, November 22 FOE was in the process of negotiating a binding agreement for the sale of the Bolette Dolphin to a selected buyer at a price of $340 million.

The implementation of the proposal, starting with the sale of the Bolette Dolphin, requires the unanimous support of FOE’s secured lenders.

However, the key terms of the proposal have received the support from all lenders except for one. Therefore, certain of FOE’s secured lenders informed FOE last week that they would submit to Oslo Tingrett a petition for an injunction against the one secured lender obstructing the proposal in order to procure that the lender consents to the sale of the drilling unit Bolette Dolphin.

Before managing to resolve the situation with the lender, FOE said on Wednesday, November 28 that the potential buyer of the Bolette Dolphin has withdrawn from the sales process given the significant change in oil and equity prices coupled with the uncertainty around the restructuring and sale process.

Therefore, at present, FOE’s restructuring proposal is not viable and FOE will consider other restructuring alternatives in dialogue with its key stakeholders.

FOE previously said that, unless a solution is found to the refinancing, the company would need to file for bankruptcy.

Offshore Energy Today Staff