OH Meling has reached a deal with lender SpareBank 1 SR-Bank allowing it to navigate poor markets for its tankers and offshore vessels.
Chief executive Olav Meling expressed confidence in the privately owned company’s future, thanks to the arrangement.
“This is a solution that both the bank and we can live with,” he said, without providing details of the transaction.
In its recently released annual report for 2018, the Norwegian shipowner said it was at risk of having to inject capital, even if instalment payments are suspended on its loan.
OH Meling had long-term debt of NOK 575m ($64.3m) at the end of last year, according to the report.
The company owns two offshore supply vessels built in 2007 and 2011, and 50% stakes in the 16,600-dwt product and chemical tankers Stavfjord and Stav Viking (both built 2009). “These are expensive ships,” Meling noted.
The vessels were reportedly ordered at Jiangnan Shipyard in China for $32m each.
The company wrote down the value of one of the OSVs by NOK 9m last year, according to the report. There were no writedowns for the tankers in 2018.
The report also referred to “general uncertainty on how the market in supply will develop in 2020 and 2021”.
The tankers were on time charters to Equinor until March this year, when the oil company decided not to exercise options to extend.
Meling said although he is optimistic about prospects for the company, it will be cautious in taking on new investments.
The book equity was reduced from NOK 141m to NOK 110m at the end of last year. Four years ago, the figure was nearly NOK 300m.
The annual loss was NOK 31m — slightly up from NOK 30m in 2017.
