Norway's Boa Offshore is restructuring its loans and bonds in a bid to put its business back on an even keel and stop staff leaving.
The owner of 20 offshore support vessels, dredgers and tugs underwent a financial reorganisation in 2017, but now has to revisit this agreement.
Boa said: "In general, and in particular for the OSVs, the recession seems substantially longer and deeper than anticipated back in 2017."
The shipowner has now agreed new terms with certain major financial creditors and is asking bondholders to push out maturity dates to 2024.
The refinancing involves more than NOK 1.8bn ($166m) of bonds and NOK 2.5bn in loans and guarantees.
Lenders will discharge guarantees of NOK 1.16bn to increase cash distribution to bondholders.
Employees need to be motivated
The main goals are to secure clear and predictable conditions to rebuild the company in a controlled manner and motivate employees by ensuring that they are working for a group with growth ambitions, Boa said.
The company also wants to clear a path to the best possible recovery for all creditors.
"Current limitations and unpredictable room for a proper and attractive running of the company need imminent actions to keep key personnel," Boa said.
Boa revealed that examples of key personnel lost include its OSV fleet director and project director, "several" important people in engineering, technical and operations departments, and its head of human resources.
"The changes are aimed to secure a solid long-term foundation for a continued and increased creation of value for the group’s shareholders and creditors through, inter alia, strengthened Boa Management," Boa said.
Management fees to increase
In-house manager Boa Management has been hit by the sale of two vessels owned by group company Boa SBL, which has removed NOK 12m annually in management fees.
Boa Management will now receive higher management fees from other group companies.
Fees due from subsidiary Boa OCV will be increased from NOK 16m to NOK 19m per year.
Boa OCV owns two of the world’s most high-specification offshore construction vessels.
Bondholders in three issues will be given the right to participate in the governance of the group through the issuance of B shares.
The group currently has sufficient liquidity for operations and to pay all of its external suppliers and trade creditors, it said.
Management ties cut to owner Ole Bjornevik
Boa Offshore is 100% owned by shipowner and former Boa Offshore chairman Ole Bjornevik's Taubatkompaniet.
A company called Det Nordenfjeldske Dampskibsselskab, previously Boa Investment, will be sold to Bjornevik and proceeds given to bond creditors.
In return, Taubatkompaniet's management agreement with Boa Offshore will be cancelled and Bjornevik will receive a yearly pension of NOK 1m from Boa Management.
The company said in a presentation that its management focus had been wrong. It had been too engaged in "firefighting" and creditor discussions at the cost of business development.
In August 2019, the board was approached by a Boa OCV bondholder who raised concerns about some directors not being independent.
The company risked bondholders taking control of the subsidiary if it did not act.
It is now trying to escape its current "downscaling scenario", which Boa said is shrinking values for all parties.
