Shearwater amends capital structure, strengthens financial position

The marine seismic company said it has agreed amendments to its capital structure, improving the group’s free liquidity and strengthening its financial position.

The agreement with lenders was reached after bondholders failed to support a written resolution in which the company proposed amendments to the terms of its bonds. In early June, more than a third of voting bonds rejected the proposed resolution, after which the company opted to proceed with an alternative solution based on an injection of equity.

In a 12 June statement, Shearwater said an equity capital injection and debt amendments, in addition to the previously announced divestment of SW Baret, have materially improved its liquidity outlook, reduces near- to medium-term debt service requirements, and provides increased financial flexibility to support ongoing operations.

The group will receive a capital contribution of US$40M in new equity or subordinated shareholder loan. Shareholders in Shearwater Geoservices Holding, the company’s parent company, have committed to the full amount.

US$25M in instalments, previously deferred from H2 2025 until January 2027, have been extended to the final maturity of the facilities in April 2029.

The company’s minimum cash covenant will immediately be reduced to US$40M and then to US$30M in Q3 2026. An existing leverage ratio covenant will be suspended for a period of two years. From Q2 2028, the leverage covenant will be replaced by a free cash flow to debt service covenant, aligning the covenant testing with the Group’s cash flow profile. A minimum equity ratio covenant will be reduced to 30%.

The company said all covenant amendments relate solely to its bank facilities. Shearwater’s bond facilities remain unchanged and continue to be governed by their existing terms.