Norway's Solstad Offshore has announced a new reverse stock split plan as it awaits a crucial vote on its $2bn debt restructuring.
The offshore vessel owner's shareholders will have their say on Tuesday on a scheme to convert $1.1bn of borrowings into equity to ensure sufficient liquidity after years of weak markets.
They will also vote at an extraordinary general meeting (EGM) on a new plan from the company that would see 1,000 shares merged into one.
This consolidation is part of the restructuring, the company said.
Chief executive Lars Peder Solstad told TradeWinds: "After the conversion of debt to equity, there would have been too many shares at too low nominal value."
He added: "A 1,000 to 1 split gives a better overview for everyone."
Banks and bondholders will take over 99.6% of Solstad in the refinancing deal, but key shareholders like the Solstad family and shipowning tycoons John Fredriksen and Kjell Inge Rokke will be granted the chance to build their holding back up to 35%.
They have indicated that they will do this, at a cost of just NOK 70m ($7.5m).
The CEO added: "Tomorrow's EGM will (hopefully) approve the agreement we announced a few months back."
The remaining debt will be rolled up into a new four-year loan of $886m.
Vessels to be sold
The plan will also see 37 non-core vessels sold, leaving Solstad with a fleet of 90 units.
Solstad logged a net loss of NOK 805m in the second quarter, compared with NOK 342.5m in 2019.
The 127 ships brought in revenue of NOK 1.33bn, against NOK 1.37bn a year ago.
The six-month loss is now NOK 3.05bn
Last month, Solstad offered to buy back a slice of debt from creditors at a huge discount.
The shipowner conducted a reverse auction to repurchase up to NOK 967m of liabilities.
The company had NOK 69m to spend on the debt and pledged to acquire liabilities offered at the lowest percentage first.
In the end, Solstad only spent NOK 23.6m on the full NOK 967m.
