SeaBird Exploration Plc says it is highly likely that it will require new liquidity by Q3 2017 and is hoping to restructure to reduce debt and attract new equity.
The seismic survey company is proposing to its bondholders and certain of its other creditors a debt restructuring of the SeaBird group that, if successfully completed, will facilitate a comprehensive restructuring of the group’s balance sheet.
Following the restructuring, debt in Seabird will be reduced by US$22.0 million and lease obligations will be reduced by US$10.4 million. The remaining debt under the SBX04 bond loan and the Glander credit facility will be US$5.0 million and the remaining lease obligations (payable in kind until maturity) will be US$2.4 million.
Completion of the restructuring is subject to the satisfaction of outstanding conditions outside of the control of the company, which says that constructive discussions have been held between the company and its restructuring advisors, and a significant number of the stakeholders whose consent to the restructuring are required.
Due to market uncertainty, contracting lead times, deteriorating orderbook as well as upcoming debt maturities in 2017 and Q1 2018, Seabird has since Q1 2017 facilitated discussions between its stakeholders to find a refinancing solution.
SeaBird said its cash position is the main challenge. Forecasts show it could run out of cash in August 2017. New contracts may improve this situation, and there are several opportunities in the pipeline, but the timing of these is critical. “It is highly likely that a liquidity injection is required by early in Q3 2017,” SeaBird says, but to attract new equity, the company must have “very limited” debt obligations.