Knud Pontoppidan-chaired Nordic Shipholding is seeking to complete a "strategic transaction" as debt talks continue with lenders.
The Danish owner of five product tankers has liabilities of $90.2m maturing at the end of 2020.
"Given the maturity of the company’s debt facilities...the board is currently very focused on consummating a strategic transaction," the company said in its 2019 report.
"The objective in that regard is to remove financial uncertainty and create a platform for sustainable growth."
But it added that, due to the Covid-19 pandemic, "the success of such strategic transaction is subject to material execution risk".
Nordic could not immediately be contacted for further information.
As part of a loan restructuring agreed in 2018, quarterly instalments were deferred to December this year.
The covenant waivers that also formed part of this deal expire at the end of September.
Nordic is in talks with banks and its majority shareholder Nordic Maritime to achieve a longer-term agreement, the outfit said.
Shareholder loan gets bigger
Loans from Nordic Maritime increased by $1.1m to $10.4m over 2019 due to accrued interest.
The worldwide spread of the coronavirus has not had a significant impact on the group and its earnings to date, the company said.
"It is, however, expected that during the next six months and maybe more – depending on the further spread of Covid-19 – a number of shipping-related services will be affected which again will affect the normal operation of vessels," Nordic said.
The tanker owner pointed to potential impacts from limited, or totally halted, crew changes, vetting inspectors and service engineers not being allowed to travel, lack of supplies and spare parts, a two week quarantine when a vessel arrives at a port, and closures of straits and canals.
In normal times, the tanker rate boom caused by the Opec+ price war should continue, the company said.
But if the outbreak tips the world economy into a deep recession, the general positive expectations may not be realised, it warned.
Forecasting goes out of the window
Nordic is unable to provide a profit forecast for 2020.
The company owns four handysize tankers and one LR1 product carrier.
The handysizes are employed in the Hafnia Handy Pool, and the LR1 in the Hafnia LR1 Pool.
Its 2019 financial performance was in line with expectations, it said.
There was a substantial improvement in the tanker market from October until the end of February this year.
The net loss in 2019 was $3.9m, due to depreciation and impairments, down from $23.8m in 2018, when it booked an impairment of $13.2m.
Revenue from the tankers was $36.1m, against $32.78m the year before.
"Performance in the tanker market started positively for the first two months of 2020 as rates have improved significantly since October 2019," Nordic said.
"However, for the rest of the year, the group’s performance will be impaired by the negative impact on the world economy arising from the unprecedented drop in oil price and even more so by the Covid-19 situation."
