OSV owner focuses on returning to long-term financial health

In its Q2 2019 financial report, Solstad Offshore said such a financial plan could involve “a comprehensive restructuring of the company, including a potential significant dilution of the shareholders.”

At the end of October, Solstad Offshore and its creditors agreed to extend the suspension and deferrals of payments under its financing agreements until 31 March 2020, subject to certain milestones being met throughout the period. Solstad Offshore called the suspension’s extension “an important step towards a solid financial platform through a consensus-based restructuring.”

Solstad Offshore’s bondholders have also agreed to suspend payments under the company’s bond issue until 20 December 2019, with discussions continuing regarding an extension to match that of the suspension period.

A key for the Norwegian OSV owner has been securing contracts and conducting business as usual during the suspension period.

Indeed, Solstad reported it had been awarded a contract with Wintershall DEA for between 120 and 200 days to support operations in Norway, starting Q4 2019, with coverage by the PSV Normand Skude.

Separately, Solstad Offshore struck a three-year contract with Inpex Operations Australia to provide the AHTS vessels Norman Scorpion and Norman Sirius to support additional drilling for the Ichthys LNG development. Both vessels will mobilise out of Broome, Australia in Q1 2020.

Solstad has also been selling off some of its fleet. An undisclosed buyer has purchased 2003-built Far Swift from Farstad Supply, a subsidiary of Solstad Offshore. It is the the fourth vessel sold this year by Solstad.

Built in Vard Brevik, the 16-year-old platform supply vessel (PSV) was sold for US$2.5M, according to UK-based ship valuations firm VesselsValue. Solstad said the sale will have a minor positive accounting effect for Q4 2019.

During the first three quarters, Solstad reported sales of 2003-built PSV Lady Melinda, 1999-built PSV Far Star and 2002-built anchor handling tug supply vessel Far Saltire.