Olympic Subsea has warned its financial situation is unsustainable and said it is in default after one lender walked out of restructuring talks.
The Oslo-listed company is the latest offshore vessel owner to announce a refinancing in the face of dire spot markets caused by the oil price fall and Covid-19 disruption.
The company, founded by chairman Stig Remoy in 1996 with chief executive Bjorn Inge Kvalsund, said it had started discussions with its creditors to reduce the repayment profile.
"This said process is ongoing and constructive, and in order to provide further time to secure a solution for the benefit of all stakeholders working towards a long term solution within 1 September 2020," Olympic Subsea added.
Payments of interest and principal amounts have been postponed.
But the company said one of the lenders in the banking group has left, with the intention of exiting its relationship with the company.
This has caused Olympic to be in breach of the relevant loan agreement, which has triggered a cross-default under other contracts.
Other lenders waive defaults
"The other lenders in the bank group have waived cross-default under their facilities with respect to the mentioned breach and the positive dialogue with the rest of the company’s bank group continues," Olympic said.
The fleet comprises 11 multipurpose offshore support ships, including platform supply vessels and anchor-handling tug supply units. Two are in layup.
Interest-bearing debt related to the long-term financing of the fleet amounted to NOK 2.8bn ($302m) at the end of the first quarter.
Bond obligations were NOK 286m. Total assets stood at NOK 3.3bn, while it had negative equity of NOK 8m.
Position is 'unsustainable'
Olympic remains in talks with bond trustee Nordic Trustee, it said.
The owner admitted the financial situation of the group is "unsustainable as the liquidity is under pressure".
"The long term viability of the company business depends on finding a solution to its financial situation and the company is in this respect in continuous discussions with its key creditors."
Olympic views talks as having a reasonable possibility of success.
"If the discussions are not successful, and in the event the group should be forced to realise its assets, there is a risk that these will be realised at a lower value than the carrying amount, as value in use is higher than estimated sales values for several of the vessels," Olympic added.
The shipowner sees a gradual offshore recovery within subsea, proven by recent long term contracts and significant new backlog, it said.
And it also believes renewable energy activity will continue to grow longer-term.
The net loss for the first quarter was NOK 70.3m, against NOK 27.4m in 2019.
Revenue was down at NOK 115m from NOK 131m a year ago.
