Norway’s Seaway 7 has revealed details of a $650m fundraising drive to pay for two wind turbine installation vessels (WTIVs) on order in China.
The Oslo-listed company said the financing plan will give it the $550m needed for the ships, as well as money for future capital needs.
Seaway 7 was formed last year out of the combination of the renewables division of Kristian Siem’s Subsea 7 with Arne Blystad’s heavylift shipowner OHT.
The 142-loa Seaway Ventus and 50,300-dwt semi-submersible Seaway Alfa Lift are due to be delivered from China Merchants Industry Holdings in 2023.
The Seaway Alfa Lift’s handover was delayed from this year after a crane accident last October.
Both ships are due to start work in 2024.
“Delivery payments on these vessels are anticipated to represent the peak funding need of the company,” Seaway 7 said.
Other cash requirements relate to potential upgrades and new equipment on other ships in the fleet.
The financing consists of a fully underwritten rights issue worth $200m, a $300m revolving bank credit facility and a $150m shareholder revolver.
The three biggest shareholders, Kristian Siem’s Subsea 7, Blystad’s Songa Corp and Norway’s Lotus Marine, will take part in the stock sale, and the deal is being guaranteed by Subsea 7.
The right balance
The banks will lend only if the rights issue succeeds, and the shareholder loan will come into play only when the lenders’ $300m has been fully drawn.
Interest will be 4% over the secured overnight financing rate.
“On a fully invested basis, the mix of equity and debt in the financing plan outlined above enables the company to achieve a balance between debt and equity funding at an attractive cost of capital,” Seaway 7 said.
The company said it is experiencing strong market demand for its services, driven by the energy transition and energy security considerations.
“The increased demand is enabling a repositioning of the contractual risk/reward balance for contractors such as Seaway 7, and the company believes it is well positioned to win its fair share of installation contracts, both with its existing fleet and with its two newbuild vessels,” it said.
The owner is expecting a strong financial performance after the new ships are delivered.
