Siem Offshore has moved closer to sealing a $1bn debt freeze, but must still work on convincing overseas lenders and its bondholders to sign up.
The Norwegian offshore support vessel (OSV) owner, backed by investor Kristian Siem, said secured lenders in Europe and Norway have agreed a standstill until 30 April 2021.
The deal includes a 100% deferral of principal and interest payments, and a waiver of financial covenants, including loan-to-value provisions.
But Siem Offshore said talks continue with banks in Brazil and Canada, and the overall standstill is conditional on this being finalised. It also depends on bondholders in two issues worth NOK 1.1bn ($111m) deferring payments until the same date.
The global OSV sector has been hit by falling oil prices and restrictions caused by the coronavirus outbreak.
Time gained for long-term deal
"The standstill agreement will improve the company’s cash flow and liquidity and secure sufficient cash to operate the fleet in a challenging offshore market with possible down time caused by Covid-19, during the next 11 months," Siem Offshore said.
"The intention is for the company and its lenders to use the standstill period to agree a long-term plan to take the company through the prolonged downturn and preserve the earnings capability to allow for repayment of debt when the market recovers."
On 18 May, the company had extended the European standstill to this Friday.
The company has been able to cut its debt from $1.6bn over the past five years.
In April, it said it seemed that banks had been unwilling to take a leading role in driving consolidation in the sector to help owners get through the slump.
"Most of our lending banks are lenders to several, if not all, of the competing OSV owners, and are in the position to influence this required development. Disappointedly [sic], the banks do not appear willing or prepared to assume this vital role," it added.
Siem Offshore posted a net loss of $23.8m for the first three months of 2020, a slight improvement compared to the $24.1m loss in the same period of last year.
The fleet totalled 33 vessels as of 31 March, including partly-owned units and one ship hired on a bareboat contract.
