Volstad Maritime freed itself of its defaulted NOK 498m ($62.4m) bond this week after bringing in Norwegian shipowner Per Saevik as a white knight.
Saevik has purchased a 50% stake in the private offshore shipping company owned by Ola Volstad, confirms Volstad chief financial officer Eirik Syversen.
The investment is believed to be about NOK 290m ($36.4m). This relatively modest amount gives half-ownership in nine mostly subsea vessels with a book value of NOK 4.3bn ($539m) in Volstad’s accounts for 2016.
■ Eight of Volstad’s nine ships are on period charters within the subsea, dive support and seismic sectors.
■ Of the five subsea ships, Volstad’s 127-metre Grand Canyon (built 2012), Grand Canyon II (built 2015), Grand Canyon III (built 2016) and the 122-metre Deep Cygnus (built 2009) are all on charters to US-listed Helix Energy (see story page 26). The 106-metre Volantis (built 2008) is on charter to Norwegian subsea specialist DeepOcean.
■ The one support vessel, the 106-metre Bibby Topaz (built 2007), is with UK contractor Bibby Offshore.
■ Of Volstad’s three seismic ships, the 108-metre Geo Caspian (built 2010) and 106-metre Oceanic Endeavour (built 2008) are on charter with troubled French geophysical company CGG. Eirik Syversen indicates that the ships with CGG are working and generating cash, which means they are more likely to be kept in the fleet. The French company has so far not approached Volstad in relation to those charters.
■ The 77-metre Geco Bluefin (built 1980), which was on charter to Schlumberger’s WesternGeco, has been laid up in Aalesund since 2015.
Syversen declines to comment on the amount but says negotiations to bring in the Saevik family had been going on for about two months before the default.
The investment is through Saeviking, a full subsidiary of Havila Holding, which also holds a 50.96% stake in Havila Shipping.
Volstad turned in a strong pre-tax profit of NOK 290m on revenue of NOK 818m last year but had said early it would lack the liquidity to pay the bond due on 5 July.
Syversen said the company was “very relieved” to have wiped out its debt this week — and with good reason. Bond loans in the deep crisis have been millstones around the necks of many Norwegian offshore owners. They have played a key role in complicating and delaying restructurings, or have led to loss of control.
Mergers in Norway have also seen the control of Farstad Shipping and Rem Offshore removed from the offshore cluster on the western coast. The loss of local owners has been a major concern in the area, which hosts a network of yards, vessel designers and equipment makers.
Saevik’s investment in Volstad is seen as partly motivated by a desire to preserve offshore business in the area through the downturn.
“We are very happy that we have managed to get a big investment from a local owner who knows this business and has a long background from offshore shipping,” Syversen told TradeWinds. “Now we have two experienced industrial owners who both believe in offshore and subsea going forward. And we have a set of financiers and banks who have supported us.”
Despite the crisis in the sector, Volstad has managed to “remain interesting for investors”, and that is related to its specialised focus on subsea and its “legacy charters”, Syversen said, although some contracts have been amended.
“We are cash-flow positive so far in 2017 and we expect to be cash-flow positive from an operating perspective, of course,” he added.
“The charters are there but they don’t last forever. Our clients have already trusted us with many extensions during the downturn, which is a great testament to the quality of our vessels, sailors and operations department.
“The future will depend on how the market develops, and that is true for everyone, but even in a very low-case scenario we will still have a runway into the 2020s.”
Havila Shipping chief executive Njaal Saevik will sit on the Volstad board for the family. Syversen indicates that there has been no discussion about combining the Volstad and Havila fleets.
An initial public offering is on the wish list as an effort to build up a larger subsea player.
“A listing is something both owners would look at and it is something the company is working towards but this is definitely not something that is right around the corner,” Syversen said.
“It is just not the time for that now. It has everything to do with timing and when the market is ready. But if and when that happens, then we will be ready.”
