Big Norwegian investors are digging into their own pockets to ease the liquidity crunch at Oslo-listed Songa Container.
A group of 10 shareholders including Arne Blystad and Klaveness Invest are ploughing in another $5m by buying new shares.
They will also put in an extra $4m after bondholders agreed an amendment to an issue.
The company now has the option of paying additional bonds to bondholders instead of two quarterly interest payments.
Blystad's Songa Investments is acquiring NOK 17.9m ($1.91m) of stock.
Fishing tycoon Magnus Roth's Canomaro Shipping is buying the same amount, while Klaveness Invest is adding NOK 9.27m of shares.
Potential breach avoided
At the end of April, Songa Container had warned it faced a potential breach of a bond covenant as it warned of charterer "distress" in the coronavirus crisis.
The Norwegian boxship owner is being hit by an uncertain market, delays at shipyards over scrubber retrofitting and potential uncertainty over payments of outstanding receivables.
"As a consequence of this, there is a risk of a potential breach of the group’s financial covenants in the loan agreement," the company said.
But bond maturity dates have now been extended by 18 months to June 2023 and a waiver of a loan-to-value covenant has been put in place until the end of 2021.
Songa Container had cash of $13m as of 30 April.
Blystad and other Songa Container shareholders pumped in $5m in March after a fourth-quarter loss of $4.29m, which compared with a deficit of $1.59m in 2018.
The total injected by shareholders since September is now $14m, excluding the extra $4m for the bond options.
In May, Arne Blystad disposed of almost all his stock in Norwegian shipping lender Maritime & Merchant Bank.
The Henning Oldendorff-backed bank told the Oslo over-the-counter exchange that Blystad had sold stock in two tranches in deals worth NOK 38.6m ($3.89m).
In the first quarter, the net loss was $8.55m, against $4.02m in 2019.
Revenue dropped to $6.2m, compared to $8.9m the year before.
Songa said: "Going into Q2, idle time in the market and in pools are increasing and average durations on employment is coming down."
With fuel spreads narrowing, it is halting scrubber fitting on two vessels. Songa was facing an extra $18m in costs if it pressed ahead with the work.
