Norwegian shipping tycoon Helge Mogster will see his major equity stake in offshore shipping player DOF Group wiped out after striking a long-awaited $1.9bn restructuring deal.
Oslo-listed DOF sealed the debt-for-equity swap deal that will see banks and bondholders take a majority stake after three years of talks.
The group has been trying to secure its future by reducing a NOK 18.7bn ($1.9bn) debt mountain since the second quarter of 2019.
DOF has now announced an agreement with a “substantial group of creditors and certain other stakeholders”.
“The group’s large number of creditors together with the complex financing structure have resulted in significant time and efforts taken to reach a consensual agreement,” it said.
The deal maximises recovery for all stakeholders and creates a stable, viable platform for the restructured group, the shipowner added.
The main feature is a big conversion of NOK 5.7bn debt into equity.
Terms for NOK 13bn of other debt have been revised to provide liquidity for operations and a longer repayment runway.
About NOK 675m of bonds will be placed into a new “recovery instrument” maturing in December 2027.
Existing shareholders will hold just 4% of the company if the deal goes through by the 31 October deadline.
Bondholders will get a 53.33% chunk and lenders 42.67%.
“As part of the transaction, a process for identifying a world-class board with industrial, strategic, finance and international expertise has been initiated,” the company said.
All secured lenders have signed up, as well as a group representing 40% of the bonds.
DOF’s largest single shareholder, Helge Mogster’s Mogster Offshore, which has 31.6%, is supporting the deal.
But a group of minority shareholders have banded together to fight the proposals. At last count, they had what they claim is a combined blocking stake of 34%.
The transaction will be subject to a shareholder vote.
DOF has probably been helped in finalising a deal by a recovery in offshore support vessel rates worldwide as economies bounce back from the pandemic.
It is the last major Norwegian OSV group to agree a refinancing after years of dire markets.
“The agreement that has been reached is a key milestone in the restructuring of our balance sheet,” said chief executive Mons Aase.
“I am grateful to all our employees, customers, partners, suppliers, creditors and shareholders for their continuing support through this process.
“The vital concessions from creditors will give us a more sustainable debt level. With this firm financial footing and our continuing best-in-class fleet and operational capabilities, DOF is positioned to maintain its leadership position in the market.”
DOF said it has undertaken to prepare a plan for the future organisation and structure of the group.
This will include establishing DOF as a non-operational holding company with no assets other than “certain shareholdings and other assets as may be necessary”.
The company has been contacted for further information on this.