Chemical tanker owner Odfjell is confident it can deal with a looming $82.5m bond maturity — even if it fails to refinance the issue in the meantime.
Chief financial officer Terje Iversen explained the Oslo-listed company will have enough cash to pay off the remaining amount in January.
The company repaid $50m of a revolving credit facility in July and signed a term sheet for a $50m short-term loan earmarked for the bond balloon payment.
This is in case it does not decide to refinance the issue if terms are unfavourable.
Together with $27m in cash from terminal disposals, the cash balance after paying the maturity would still be $125m.
If the new $50m loan is added in, that figure rises to $175m.
Iversen told analysts on a conference call: "Our game plan is still to refinance that bond before maturity if we find the terms acceptable or favourable to Odfjell. But we have built contingency."
Bank financing available
The shipowner said it continues to see "strong interest from existing and new financing lenders".
"Upcoming and other early refinancing projects are progressing as planned and we are building liquidity reserves to strengthen our balance and increase flexibility in our capital structure," the company added.
Odfjell has also agreed the refinancing of a bank loan facility due to mature in September covering four vessels.
There are no other debt maturities before the second quarter of 2022.
Net earnings were $30.9m in the second quarter, turning around a loss of $10.2m a year ago and lifting the six-month profit to $26.5m.
Revenue rose to $252m from $243m in 2019.
Net interest bearing debt at the end of June was $1.04bn.
