Siem Offshore has moved closer to a standstill deal with banks after clearing its Canadian debt.
The Olso-listed offshore vessel owner's subsidiary Secunda Canada has made a payment of 61% of the outstanding amounts owed to three Canadian lenders in a full and final settlement of its borrowings.
This was one of the conditions of a standstill deal put in place with European lenders in May to secure liquidity in the coronavirus-related downturn.
Siem, backed by investor Kristian Siem, still has to get Brazilian banks on board for the payment freeze to come into effect.
This would halt principal and interest instalments until 30 April 2021, giving it time to seek a long-term financial restructuring of its $1bn debt pile.
The company has also been trying to persuade holders of bonds worth $111m to extend maturity to the same date.
The standstill agreement includes a waiver of financial covenants, including loan-to-value provisions.
Siem Offshore chief financial officer Dagfinn Lie was not immediately available for further comment.
Cash flow to be improved
The company said in May: "The standstill agreement will improve the company’s cash flow and liquidity and secure sufficient cash to operate the fleet in a challenging offshore market with possible down time caused by Covid-19, during the next 11 months."
Siem said at the time that its intention, and that of its lenders, was to use the standstill period to hammer out a long-term plan to get the company through the downturn and preserve earnings capacity to pay down debt when the market eventually recovers.
The shipowner has been able to cut its debt from $1.6bn over the past five years.
Siem posted a net loss of $23.8m for the first three months of 2020, a slight improvement compared to the $24.1m loss in the same period of last year.
The fleet totalled 33 vessels as of 31 March, including partly-owned units and one ship hired on a bareboat contract
