Hornbeck Offshore Services has the cash to cover its near-term debt. Further out? Not so much.
In Securities and Exchange Commission filings, the offshore vessel owner assured investors that it had enough liquidity to pay back bonds coming due later this year.
But absent a recovery in the offshore sector and further management, it will not be able to pay back its remaining 2020 and 2021 due debt.
"We continue to have constructive dialogue under non-disclosure agreements with the professional representatives of the ad hoc group of our 2020 and 2021 senior noteholders," read draft remarks from chief executive Todd Hornbeck filed with the SEC.
"These discussions can go in many different directions, however, our guidepost is that we want to find a solution for our stockholders that is in-line with the intrinsic value of our company in a recovered market."
Hornbeck noted that "various combinations of discount capture, maturity extension, credit enhancement and/or improved economics, including the potential use of limited equity", were all on the table to solve the problem and that par repayment is possible.
Issuing equity, Hornbeck, was not as attractive an option, but could be a solution if it got other concessions that benefitted shareholders.
Louisiana-based, New York-traded Hornbeck is one of the only major offshore players not to file bankruptcy during the sector's multi-year downturn.
With many in the sector forecasting a turnaround, with rig counts and rates rising, Todd Hornbeck previously told TradeWinds that negotiations would become easier.
The company has spent much of the year either extinguishing or pushing back upcoming debt maturities, mostly focusing on the 2019 and 2020 notes.
For the second quarter, Hornbeck's offshore support vessels were fetching effective day rates of $5,878, versus $5,901 in the first quarter and $5,283 for the second quarter of 2018, while posting a $31.9m loss versus a $25m loss for the same period the year prior.
"Today, we reaffirm the positive views we have been expressing on our last three quarterly earnings calls," the draft remarks read. "The market has begun to improve.
"It is not a recovered market yet, but it is on a path to recovery and, unless derailed by events that no-one can predict, our business should enjoy the fruits of the turnaround."
