Norwegian offshore support vessel owner Dof Group has been forced to ask for more help from banks and bondholders as its cash position deteriorates.
The Oslo-listed company said the coronavirus, the oil price fall and "extreme" currency moves have all had a direct negative impact on its liquidity.
It 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.
If this cannot clinched by 30 April, bondholder approval will lapse, meaning interest payments will fall due in April and May.
On Friday, it said it was requesting a general standstill of payment of all interest and instalments from its secured lenders and other financial creditors.
It is also seeking emergency loans.
The "significant negative market developments" were not foreseen when the original refinancing proposal was put forward, it added.
"As a consequence of the sudden and significant uncertainties caused by these recent developments, the ongoing refinancing of the group will necessarily be delayed and the group has announced that it will continue its dialogue with the banks and bondholders to secure a long-term financing solution, which also must be sufficiently robust after the recent developments."
Bondholder meetings called
To help make this possible, it has called a bondholder meeting to approve a standstill in three issues worth a combined NOK 1.58bn, potentially to 31 January, 2021.
Dof will first seek to stabilise the situation, together with its major lenders, and then reopen the dialogue with all stakeholders.
It has been hit by big currency fluctuations, resulting in a loss of more than NOK 200m this year.
This has caused it to use overdrafts on certain cash pool accounts. But it has obtained bank support for this so that it is not in breach of any covenants.
"The sudden and extreme currency fluctuations have resulted in liquidity challenges for the group," it said.
"The group is in a close and constructive dialogue with its banks to discuss alternatives to solve the liquidity situation of the group in the short and medium term as a result of the recent developments."
New loan quickly agreed
It has already won the support of its lenders at "very short notice" through a NOK 100m credit facility to cover immediate cash needs.
Talks are taking place about a new and larger credit facility to cover short-term liquidity needs, covenant waivers and interest deferrals.
It warned: "Due to the nature and extent of the recent developments, it is currently necessarily too early to conclude on all of the implications of such developments, including the group's ability to successfully secure the required solutions with the banks and other creditors."
The company said future currency developments will necessarily impact it, and it is likely that the equity of the group will be "materially adversely affected".
Operations continuing as normal
Dof said it has been able to continue normal operations of its vessels even if replacement of crew has become, and is expected to become, increasingly difficult
"However, there is a general increased risk in the sector of postponements of offshore projects as a result of Covid-19 and the decline in the oil price, which also could involve the group's vessels and assets even if the group so far, naturally only to a limited extent, has been impacted by these events," it added.
This week, domestic rival Solstad Offshore sealed a preliminary agreement to swap $946m of debt for equity and sell 37 ships, while Siem Offshore pushed back repayments on $1bn of debt to avoid a cash crunch.
Dof's net loss in the final quarter of 2019 was NOK 512m against NOK 774m in the same period of 2018.
