New DOF group chairman Hans Olav Lindal believes offshore support vessel (OSV) owners must now restructure or fail.
This is due to the double effect of the oil price crash and coronavirus restrictions on an already struggling sector, in which some companies were still trying to force through a second round of refinancing after the 2014 slump.
The Norwegian lawyer is being elected this month to oversee the group's restructuring after major shareholder Helge Mogster resigned from his position last week.
He joined the board as a director last year.
"Having worked closely with Helge Mogster, the rest of the board and the management of DOF during the last few challenging months, [it] has really made me appreciate both the legacy and potential of this company," he told TradeWinds.
"I believe all stakeholders recognise that the company's business is fundamentally strong, with a quality asset base, highly competent and experienced people both on shore and off shore, a solid track record and very strong customer relationships."
This gives DOF a strong competitive position, he argued, with the goal being to continue as a leading player in the market in the long run.
'Market dislocation'
But he added: "The problem is of course the dislocation of markets that we have experienced over some years now, topped by the recent combination of new negative developments, which no one in this sector can survive unless we restructure and adapt for a different future."
Lindal said preparatory talks have been under way for some time with banks and bondholders.
"Together with our appointed advisors we will now intensify this dialogue to align the medium and long-term business prospects considering the new circumstances, with the view to reach a solution maximising values for the benefit of all stakeholders," Lindal added.
Mogster, who owns 48.95% of the group, will step down at the shareholders meeting on 28 May.
He has been in the chair for 18 years, but will also step down as chairman of subsidiary DOF Subsea.
Lindal will take over at a "very challenging" time, DOF said, with "extensive and comprehensive processes" being carried out related to the refinancing of the group.
"This will be demanding for the board of directors and the management, and will involve other and extensive requirements," the company added.
The company said Mogster will still be heavily engaged in the business, and will focus his efforts on his ownership role.
Lindal, a partner at Norwegian law firm Thommessen, works mainly with mergers and acquisitions and legal matters related to shipping, and assists shipowners and other clients with matters concerning contract law, corporate law and financing.
Lindal also has board experience at shipowners Viken Shipping, Gearbulk, GC Rieber Shipping and G2Ocean, as well as Wallem Group and the Norwegian Hull Club.
Emergency help sought
He joins DOF in a year that chief executive Mons Aase expects to be tough.
"In the situation our industry is in today, it is very difficult to predict how the remainder of 2020 will look. We will need to continue to adapt to the new, temporary market conditions, while at the same time deliver best-in-class results," Aase said in an annual report.
Last month, DOF was forced to ask for more help from banks and bondholders as its cash position deteriorated.
The company was already trying to push through a refinancing plan with creditors that had envisioned injections of NOK 700m ($67m) in new equity while stretching bond maturities.
DOF had said it was requesting a general standstill of payment of all interest and installments from its secured lenders and other financial creditors.
The Storebo-headquartered company is also seeking emergency loans.
