Solstad agrees terms for two anchor handlers. Closes financial restructuring

Norwegian vessel owner Solstad Offshore has finalized negotiations regarding its financial restructuring and agreed on conditions for two Ocean Yield’s anchor handlers.

Solstad said on Monday that it had agreed on financial restructuring of the company under a plan laid out in late March.

Under the plan, Solstad signed a restructuring implementation agreement (RIA) for a restructuring of the group.

The restructuring includes debt to equity conversion of around NOK 10.9 billion ($1.07 billion), new $886 million fleet loan maturing after four years, financing of additional liquidity, industrial shareholders to retain ownership of up to 33.34 per cent, and the streamlining of the corporate structure.

The RIA has been entered into with a majority of the restructuring’s key stakeholders, including all of its secured finance providers except for three financial providers in the Solship Invest 3 and Farstad Shipping silos.

The company added that the new agreement would strengthen its balance sheet and liquidity, that its fleet will be refocused, and 37 vessels of the older and less sophisticated vessels are envisaged to be sold or scrapped over time.

The long-term business of the Solstad Offshore will be based on a core fleet of approximately 90 vessels.

It is worth noting that the closing of the restructuring is expected to take place in July 2020, however, the RIA has a long stop date which can be extended to 8 November 2020 if more time is required.

According to Solstad, the leasing agreements for two vessels owned by a subsidiary of Ocean Yield ASA, F-Shiplease, will be replaced by new lease agreements on amended terms.

Claims under the existing lease agreements for the Far Senator and Far Statesman anchor handlers will be converted into shares in the company.

The charter rate payable under the new lease agreements shall be a reference rate equal to the average per vessel EBITDA in a pool of seven similar vessels.

Also, F-Shiplease will carry all upside/downside from the operation of its vessels during the charter period.

Upon completion of the restructuring, the existing shares will represent 0.4 per cent, and the converted debt will represent at least 64-75 per cent of the company’s shares.

Solstad Offshore CEO Lars Peder Solstad said: “We are very pleased to announce this restructuring agreement today. It has been a long process leading up to this important milestone, and we are grateful to the stakeholders for their continued support and trust in our company.

“This agreement will be important for our clients, employees, financial creditors and shareholders, as it reduces uncertainty and will allow us to focus even more on our core activities which are delivering high-quality services to our clients.

“Our industry is facing challenging times in light of the COVID-19 pandemic and the reduced oil price, but a restructured Solstad Offshore will be in a much better position to handle these challenges.“