French offshore shipping giant Bourbon Corporation has put 41 platform supply vessels (PSVs) up for sale as it restructures its operations.
The company said it is "accelerating its transformation" with a new action plan, Bourbon in Motion, to boost competitiveness in a challenging sector.
CEO Gael Bodenes said: "As the market cycle has bottomed out, Bourbon must focus more than ever on operational excellence, fleet utilisation rates, cost reduction program and free cash flow preservation.
"However, we need to go even further, because market overcapacity is driving prices down sustainably and we believe that tomorrow will look very different from yesterday.
"The crisis has highlighted the need to change our model and this is what the #BOURBONINMOTION plan is all about."
Three-way split
The group will be split into three distinct affiliates: Bourbon Marine & Logistics, Bourbon Subsea Services and Bourbon Mobility.
They will focus on profitable growth, changing their model to develop more integrated services, with an emphasis on "smart shipping" digitalisation to connect its fleet of 132 modern platform supply vessels (PSVs).
This will improve operational excellence at optimum cost, it said.
The programme will mean an investment of EUR 75m ($92m) over three years and enable a sustainable reduction in vessel operating costs.
But within its traditional fleet of 65 vessels, 41 of its oldest cannot be connected in this way.
They will be sold at current market prices, generating an expected impairment loss of about EUR 170m.
The ship in question have an average age of 11.2 years, and have been stacked for longer periods than other vessels.
Bourbon is targeting the fleet sales at the 40% of its competitors that have less than 10 ships, with an average age of 23 years.
The company has been maintaining a "pro-active" layup stance in recent months.
In its six-month result update last year, it said it had 100 PSVs stacked.
The company said the net loss in the first half of 2017 was EUR 170.4m, from EUR 87.3m in 2016.
Clarksons lists Bourbon as having a total fleet of 305 ships, including anchor-handlers, crew boats and tugs.
2017 loss growing
Bourbon said the 2017 financial statements are currently being finalised.
Earnings before tax, interest and restructuring costs should be around EUR 250m, against EUR 383m in 2016.
The company is still being hit by challenging market conditions, provisions and depreciation, plus the weakening of the US dollar against the euro.
It is estimating a net loss for 2017 of around EUR 600m, versus EUR 279.6m a year ago.
This excludes the potential effect of impairment tests yet to be performed on its four cash-generating units: deep sea, shallow sea, crew boats and subsea.
Positive free cash flow will be more than EUR 100m, showing strong growth from the EUR 64.7m logged in 2016, however.
Bourbon said it is well-positioned to benefit from a recovery in OSV sphere.
Jacques de Chateauvieux, its executive chairman, said: "We are ready to meet the challenges of the transformation profoundly impacting the oil and gas industry and already driving major changes at our key customers.
"The #BOURBONINMOTION action plan unveils the new face of Bourbon, which is, as in the past, not afraid to reinvent itself and innovate with the commitment of the women and men who contribute to its development around the world.
"Indeed, beyond the technological revolution lies a personal revolution for all Bourbon team members."
