Vroon is edging closer to sealing a huge refinancing deal in which a group of banks take over the Dutch shipowner.
The private tanker and offshore vessel specialist said 14 of its 18 framework agreement lenders have internal approvals in place to complete the deal by the 31 March deadline.
The group believes it is “likely” that the remaining quartet will be able to sign up “shortly”, with no problems being indicated.
But Vroon remains in talks with several other lenders that are not part of the debt-swap deal under which the founding Vroon family will lose control of the shipowner.
Certain conditions have to be met in these cases, including the release of corporate guarantees and the sale of vessels.
The update was revealed in the 2020 annual accounts for UK division Vroon Offshore Services (VOS) filed with Companies House.
VOS said no alternative financing plan is being considered. Debt will be cut from almost €1bn ($1.1m) to €350m.
The company said there is much work still to be completed and material uncertainties remain.
Earnings have been under pressure for years.
Vroon has sold 60 ships sold since 2016, but found itself still significantly over-indebted.
The owner stopped repaying debt in June 2020 and finally agreed the new restructuring term sheet with its banks in November.
More ships to be sold
In cooperation with the lenders, it has agreed to divest all container ships, bulkers, crew transfer vessels and car carriers to repay debt.
Vroon has placed its “economically unviable” over-leveraged assets in a warehouse company, WHCo, that will eventually be wound down.
The other vessels will form part of a new holding company, NewCo, operated as a going concern. VOS and its fleet of about 35 ships is to be part of NewCo, plus the livestock carriers, tankers and emergency response and rescue vessels.
Markets must improve
VOS admitted that markets need to improve to meet financial targets contained in the group restructuring, which is the second in three years.
The UK division revealed a net loss of £1.66m ($2.2m) in 2020, up from a loss of $376,000 in 2019.
Revenue dipped to £8m from $9.7m.
The company endured lower utilisation and logged ship impairments of £2.5m in 2020.
18 vessels gone in 2021
In 2021, the parent group sold 18 vessels that were deemed to be uneconomic or non-strategic, including container ships, a bulker and a general cargo ship.
UK shipbroker Clarksons lists Vroon as controlling 115 ships, down from 119 in January.
The fleet will be reduced to about 100 after other planned sales are completed.
The company’s last refinancing in 2018 involved $1.3bn of debt extensions into 2021.
Fourth-generation owner Coco Vroon stepped down as chief executive at that time.
