Norway's Siem Offshore has hit out at rival owners taking "unsustainable" term rates to keep ships out of lay-up.
The Kristian Siem-backed shipowner said long-term charters are “still more or less absent” for anchor-handling tug supply (AHTS) units and offshore construction vessels.
But the company added that a handful of deals being accepted by other operators include unacceptable risk and unsustainable prices.
"In desperation, owners accept terms to avoid lay-up," Siem Offshore said.
The company continues to urge consolidation in the sector, particularly among AHTS and construction vessel players.
"In the current challenging economic situation, all parties involved have a common interest in creating a sustainable market," Siem said.
Seven-year hitch
The company sees an offshore support vessel sector now in its seventh year of "depressed conditions".
"We expect that the market will remain soft for some time," Siem Offshore said.
The company can see no certainty as to when charter rates will generate sufficient earnings to provide for full debt servicing. Exploration, offshore field development and subsea maintenance campaigns are continuing to be cancelled or postponed.
But all is not lost for OSV owners.
Summer hope for owners?
"The winter market will be slow, but we see signs that the activity for the summer period commencing in April will increase with more drilling campaigns in the North Sea, and in offshore wind," Siem Offshore said.
The net loss in the fourth quarter was $48.7m, down from $67.1m a year ago.
Revenue fell to $57.1m against $71.2m, while the annual loss hit $350.5m from $109.2m in 2019.
The fourth quarter was as difficult as feared, with low utilisation and low daily rates forcing more ships into lay-up, the shipowner said.
Impairments of $277m were logged in 2020, with more possibly to come, Siem Offshore warned.
Talks continue in Brazil
The owner's debt has been cut by $500m over the last five years.
A long-term restructuring deal has been agreed with European lenders and bondholders on the remaining $1bn in liabilities.
But the company remains in discussions with Brazilian banks to seal the refinancing. Siem Offshore has admitted legal action may be necessary in Brazil to force a deal through.
Creditors will own about 96% of the company through a debt swap if the transaction is approved.
Kristian Siem's Siem Industries, the OSV owner's largest shareholder, will see its stake cut from 83% to 30% as it converts some bond debt into stock.
