Restructuring Norwegian owner DOF Group is set to lose control of a joint venture set up with a Kjell Inge Rokke company.
The Norwegian tycoon's Akastor and lending banks involved with DOF Deepwater (DDW) are in talks to take over 100% of the shares.
The venture has agreed a standstill on debt repayment with banks until 21 August, but final discussions are taking place over a transfer of DOF's 50% stake, DOF said.
DDW owns five anchor-handling tug supply (AHTS) vessels.
Akastor is an oil services investment company that was demerged from Rokke's Aker Solutions in 2014.
DOF is the guarantor for 50% of the external debt of DDW.
The offshore shipping company, which has been hit hard by coronavirus disruption, also revealed in its second quarter results on Friday that it has made 306 staff redundant since the end of the first quarter.
It retains more than 3,130 employees.
Losses growing
The net loss was NOK 675m ($76m), compared to a deficit of NOK 106m in the same period of 2019, meaning it has now lost NOK 4.79bn in the year to date.
Revenue shrank to NOK 1.8bn from NOK 1.85bn, while it booked an impairment of NOK 779m, bringing the total charge in 2020 to NOK 2.3bn.
"The Covid-19 virus has had a major impact on the operations during the second quarter," DOF said.
"But the company has been able to protect employees and secure ongoing projects and contracts at close to normal."
Projects have been postponed and activity levels have been lower.
Debt restructuring is ongoing and standstill agreements until 30 September have been agreed, with a Brazilian payment freeze with development bank BNDES valid until 30 December.
Further extensions to these deals are expected, the company said.
Average vessel utilisation was 67% in the second quarter, with anchor-handling tug supply ships on just 48%.
As of August, 17 of DOF's ships are in layup.
Awards for project work have secured reasonable utilisation for the project fleet in the third quarter, the company added.
The charter backlog is NOK 17bn, while interest bearing debt stands at NOK 22.3bn.
Global woes
DOF said the North Sea market has been impacted by reduced activity despite a normally high season, with several vessels leaving the North Sea during the quarter.
In the Asia-Pacific region, activity has been low, and all three vessels were idle or in lay-up by end of the quarter.
One ship has been in cold layup since 2018 and has now been prepared for sale.
DOF has 11 AHTSs operating, with Petrobras as the main client.
"Historically this region has achieved high utilisation of its fleet, but after the Covid-19 situation some contracts were early terminated, and two vessels have entered into lay-up during the quarter," the shipowner said.
"An additional two vessels have been partly idle in the period. It was therefore a positive event that Petrobras awarded three new contracts by end of the quarter."
Liquidity to be strained
DOF is sticking to its strategy of securing term contracts.
"The group will further continue to adapt its cost level and adjust its capacity to the challenging markets," the company added.
"A continuing weak market will, however, increase the risk of reduced earnings from the group’s vessels and put more pressure on the group’s already strained liquidity position if a robust long-term refinancing solution is not achieved."
Market conditions will remain challenging, directors believe, and the timing of a market recovery is highly uncertain.
"The future earnings and asset values are difficult to forecast, and impairment of assets could further be expected," the board concluded.
