Lenders DNB and SEB have been able to buy back the 10-unit platform supply vessel (PSV) fleet of bankrupt Hermitage Offshore for $80m, reflecting a bid of only 62% of the debt they'd extended to the owner.
The banks were the only bidders on the PSVs, eliminating the need for a planned auction, while US-based offshore player Tidewater came away with Hermitage's 11 crew boats for just over $5m. Tidewater outbid Petro Services, a rival in the West Africa market.
Hermitage is backed by the Emanuele Lauro-led Scorpio Group, which recently sold off most of its holding in the company.
The lenders' low bid and the lack of formal interest from other owners in the offshore market came as yet another sign of the depressed sector that sent Hermitage into Chapter 11 protection in New York on 12 August.
DNB and SEB had jointly extending financing of about $133m on the fleet, which had been estimated by market sources to be worth between $85m and $100m at the time of filing.
Based on the bidding Wednesday, the low rung of that range proved to be right on target.
Some had thought the banks might bid the full value of the debt to avoid acknowledging an immediate write off on the mortgages. The lenders may now work with strategic players either on a quick sale or to operate the units and buy time for a rebound in asset values.
The 10 PSVs had been assigned a current worth of about $104m by VesselsValue.
Once the sales have been formally approved by the court, Hermitage's brief trip through the Chapter 11 process would appear to be all but over, with little chance of the company surviving as a going concern.
It nonetheless continues to trade on the pink sheets of the New York Stock Exchange, which has begun delisting proceedings that are on hold pending a December hearing triggered by Hermitage's appeal.
The share was trading at $0.06 on Wednesday afternoon.
Hermitage management has been pushing for a sale of the fleet since the onset of the bankruptcy proceedings.
After filing, Hermitage's advisors contacted 40 parties, with 12 signing nondisclosure agreements.
Hermitage had previously sold two of its anchor handling tug barges in August to an undisclosed buyer.
The company was created from the former Nordic American Offshore when the Scorpio Group took a leading stake with a $5m private placement in December 2018.
Hermitage is the second offshore company to file for bankruptcy protection since the oil price collapse in the spring.
Louisiana-based Hornbeck Offshore filed in May, seeking to reorganise its debts.
