Aberdeen-based Altera Infrastructure has extended debt repayment periods and suspended cash distributions in efforts to improve near-term cash flows.
The shuttle tanker and offshore vessel owner, whose shares are traded in New York, said main sponsor Brookfield agreed to assume $700m in debt maturing between 2022 and 2024.
Altera will issue to Brookfield an equivalent amount of payment-in-kind notes, which will expire in 2026 and carry an annual interest rate of 11.5%.
Separately, the MLP is seeking to swap $276m bonds expiring in 2023 for new issues scheduled to mature in 2026. Those are held by non-Brookfield parties.
Altera also halted quarterly cash distributions on three series of preferred units.
“The measures… are expected to significantly extend our debt maturity profile, improve the partnership’s cash flows and enhance its overall financial flexibility,” president and chief executive Ingvild Saether said in a quarterly update on Thursday.
“With the support of Brookfield, we believe these actions put the company on stronger footing to support its existing operations, including opportunities to secure new contracts.”
The MLP’s annual cash flow will expand by more than $80m following the restructuring efforts, not taking into account the bonds held by non-Brookfield parties.
Altera also unveiled the sale of three shuttle tankers and one floating storage and offloading unit for $30m in recent months, without elaborating further.
In June, scrap brokers said the MLP sold the 100,000-dwt shuttle tanker Navion Oslo (built 2001) for green recycling to Turkey.
Meanwhile, Equinor agreed to extend the charter for the 124,500-dwt FSO Randgrid (built 1995) by 12 months.
Altera recorded a net loss of $28m in the second quarter, wider than the $8m loss posted during the same period last year.
“The results for the recent quarter were mainly impacted by lower revenues in the FPSO [floating production, storage and offloading] and FSO operations,” according to the quarterly update.
Revenue dropped to $267m from $273m.
The MLP had total liquidity of $241m as of 30 June, representing an increase of $44m from the prior quarter.
Altera currently owns 47 vessels, including numerous shuttle tankers, FPSOs, FSOs, long-distance towing and offshore installation vessels, as well as a unit for maintenance and safety. The majority of them are employed on medium-term contracts.
