Dof Subsea has today called a bondholder meeting to postpone an upcoming bond repayment, while its parent group readies a rescue plan based on raising new equity.
The firm's Oslo-listed parent company Dof said it is continuing its efforts to secure long-term refinancing for the embattled subsea company, in which it owns a 65% stake.
The package, Dof said, is "likely" to include raising NOK 200m ($21.9m) in new equity, of which a "substantial portion" will be used to support the refinancing of Dof Subsea.
Laco, indirectly the largest shareholder in Dof, has committed to supporting the group in the proposed equity raise.
The shareholder is a holding company owned and controlled by Helge Mogster, chairman of the Dof Group.
Laco's support is, however, conditional upon Dof reaching a "satisfactory" refinancing solution for the group.
This, it said, should include a maturity profile that provides a runway "until the expected timing of the market recovery".
Dof has engaged ABG Sundal Collier and Pareto Securities as its financial advisors for the proposed equity raise.
Bond standstill
The next instalment of Dof Subsea's DOFSUB07 bond was due for repayment on 22 October.
"Based on the current dialogue with all stakeholders, the best estimate for reaching an agreement on the long-term solutions is during the fourth quarter 2019, however no assurance can be given at this stage," Dof Subsea said today in a statement.
Four members of Dof Subsea's board quit in early September, as TradeWinds has reported.
Norwegian investor Frederik Mohn left the boards of Dof and Dof Subsea two years after selling out of the companies.
Two days later, directors Neil Hartley, Ryan Zafereo and Alan Schwartz gave notice they would leave the company "forthwith."
Group picture
Meanwhile, the Dof group still remains at risk of breaching financial covenants with its lenders.
Dof has secured a short-term solution with its lenders and said it is still working on long-term arrangements.
"Dof has for the PSV [platform supply vessel] and AHTS [anchor handler] business a constructive dialogue with its key banks to adjust the amortisation profile and covenant structure of its bank financing to reflect the current market environment," the group said on Tuesday.
The Dof Group had an order backlog worth NOK 20bn and Dof Subsea's order backlog was NOK 13.8bn as of 30 June.
Dof owns and operates a fleet of PSVs, AHTSs, subsea vessels and service companies that operate worldwide.
In its second-quarter report, the group said it would continue to focus on reducing its costs and would adjust its capacity in "challenging" markets.
