Tanker owner Nordic Shipholding will seal a new financing agreement with its lenders next month to tackle its looming debt maturity.
The Nasdaq OMX-listed Danish company has been in talks with banks to restructure $90.2m of borrowings maturing at the end of 2020.
A deal in 2018 saw financial covenants like minimum value and minimum equity ratio waived, while the minimum liquidity level was reduced.
But this expired in September, although a freeze in quarterly instalments is in place until December.
"The company, together with its majority shareholder, are in active discussions with the lending banks on securing longer term financing for the group," Nordic said.
Negotiations are ongoing and are expected to be completed during December, when an announcement will be published, the product tanker specialist added.
"It is management’s expectation that the lenders will finance the company in a period longer than 31 December 2020," the company said.
Average rate rises
Average daily time charter equivalent (TCE) earnings for its five ships were 11% up year on year in the third quarter.
This was "short of expectation" as rates fell and one vessel was off hire towards the end of the period due to contact damage during a ship-to-ship operation. The tanker resumed trading on 28 October.
For the nine months ended 30 September, the net loss was $3.9m, against a loss of $4.7m in 2019.
This included an impairment hit of $10.7m on its fleet in 2020.
Ebitda was up at $14.2m from $3.3m in 2019.
Nordic put the 38,000-dwt Nordic Hanne (built 2007) up for sale in August as it looked to bolster its finances.
Sale uncertain
The shipowner had already booked an impairment loss on the tanker of $2m in the first half.
"Given the softening secondhand market an additional impairment loss of $2.2m will be recognised in Q3 [the third quarter]," Nordic said earlier this week.
The net carrying value of the remaining fleet has also been reassessed and an additional impairment loss of $6.5m accounted for.
The five ships, comprising the Nordic Hanne, three MRs and an LR1, will continue to operate on a pool basis.
"The estimation of Nordic Hanne’s expected sale value is highly uncertain," Nordic said.
Cash and cash equivalents stood at $6.2m.
"Barring unforeseen circumstances, the TCE revenue for 2020 is forecast to be in the region of $27m to $29m," Nordic added.
Ebitda is expected to come in at between $13m and $15m for the year.
