Viking Supply Ships said it has reached a restructuring deal with a bondholders committee that will see them swap bonds for equity and cash.
In so doing, the Christian Sveaas-backed offshore vessel owner says it will reduce its total interest-bearing debt in by approximately $50m and can stay afloat until 2020.
The agreement comes as offshore vessel owners are anticipating a multi-year recovery in oil prices before deepwater drilling activity picks up again and offshore vessel utilisation recovers from the current lows. With most offshore oil not considered economic below $60 per barrel, current futures markets show that price level not occurring for another three to four years.
As part of the deal, bondholders have agreed that half of its bonds will be converted to class B shares in Viking Supply at SEK 1.50 ($0.18) per share. Viking said the bonds are being valued at 55% of par. The remaining bonds will be redeemed for cash at 35% of par value.
Viking also plans to issue equity of $25.2m. Kistefos, Sveaas’ private investment company, will buy a pro-rata share. In addition, Viking will issue $6.6m in equity in exchange for the bonds.
The plan also calls for Viking Supply’s $215m in bank facilities to be extended through March 2020 and for the restructuring of some charter agreements.
