Norway's Solstad Offshore has succeeded in buying back a slice of debt from creditors at a huge discount.
The restructuring offshore support vessel owner this week conducted a reverse auction to repurchase up to NOK 967m ($107m) of liabilities.
The company had NOK 69m to spend on the debt and pledged to acquire liabilities offered at the lowest percentage first.
In the end, Solstad only spent NOK 23.6m on the full NOK 967m.
Bargain basement
The highest offer accepted was at only 3% of par value, meaning all the other sellers were prepared to take even less than this to shed the debt.
The offer was made to bondholders and other creditors including John Fredriksen's sale and leaseback company SFL Corp and Sterna Finance.
Unnamed creditors underwrote the full NOK 69m amount, for a fee of NOK 1m.
Arctic Securities ran the auction.
Solstad agreed a $2bn restructuring in May that will see banks and bondholders take over all but 0.4% of the company in a $1.1bn debt swap.
But shareholders including Fredriksen, Kjell Inge Rokke and the Solstad family can build their ownership back up to a combined 35% through a new share issue.
This will cost NOK 70m.
Exit route
The auction will allow these key "industrial" shareholders to retain a little more of their holdings, while giving creditors a way out of owning part of Solstad following the equity conversion.
The remaining debt will be rolled up into a new four-year loan of $886m.
The plan will also see 37 non-core vessels sold, leaving it with a fleet of 90 units.
The Lars Peder Solstad-led company logged a net loss of NOK 805m in the second quarter, compared with NOK 342.5m in 2019.
The 127 ships brought in revenue of NOK 1.33bn, against NOK 1.37bn a year ago.
The six-month loss is now NOK 3.05bn.
