Norwegian offshore shipping company, Atlantic Offshore, has decided to sell most of its operation and subsidiaries.
In a statement on Tuesday the company, mainly focused on Emergency Response and Rescue Vessels (ERRV) market, said the sale would secure continued operations and contractual obligations towards customers and employees.
According to the agreement, Atlantic Offshore AS sells most of its operations and subsidiaries to Aegopodium AS, a newly established company owned 100 per cent by H. Ogreid & Sonner AS.
The main secured creditors in the Group are parties to the agreement.
Back in February, Atlantic Offshore said its cash flow available for debt service was below interest and installments in all years from 2016—2019 in management`s risked business case, and said there was a need for a revised capital structure.
“The last few months have been extremely challenging. In the past few weeks we have continued operations under guarantees from secured creditors in the subsidiaries and we are pleased that there is now finally a solution. We have secured jobs for more than 400 skilled employees and ensured continued and uninterrupted services for more than ten offshore fields in Norway and the UK,” says Roy Wareberg, CEO of Atlantic Offshore AS. He will assume a similar role in the new company.
“It has been a tough time for all parties involved and we sympathize with those who sustain losses. However, we are confident that the result represents the best possible solution for all stakeholders,” Wareberg continued.
“The weak market will continue to be a challenge for several years, and we need to take further steps to ensure our continued competitiveness. Several contracts are up for extension later this year, and we will work hard to earn the trust of our customers and secure the value of our business,” Wareberg said.
The master agreement involves transfer of the shares in Atlantic Offshore Gamma AS, Atlantic Offshore Alpha AS, Atlantic Offshore Epsilon AS, Atlantic Offshore Eta AS, Atlantic Offshore Zeta AS, Atlantic Offshore Management AS and Atlantic Offshore Crew AS to the buyer.
Also, Atlantic Offshore said, Aegopodium has through its subsidiaries acquired certain assets and personnel in Atlantic Offshore Rescue Ltd and the shares in Atlantic Offshore Crewing Services Ltd and Atlantic Offshore Scotland Ltd from the administrator appointed in the UK with respect to Atlantic Offshore Rescue Ltd.
The consideration in the transaction is NOK 16.9 million. According to Atlantic Offshore, the new Buyer group has been capitalized with NOK 70 million, of which the owner provide NOK 50 million and certain secured creditors grant a convertible loan in the amount of NOK 20 million.
Next steps subsequent to completion of the transactions, Atlantic Offshore and the Norwegian Group companies Atlantic Offshore Beta AS, Atlantic Offshore Delta AS and Team Atlantic AS will file for bankruptcy in due course.
The Scottish Group companies Atlantic Offshore Rescue Ltd and Atlantic Offshore Aberdeen Ltd have become subject to a court appointed administration process, in which EY is nominated as administrator. Given the situation of the Company subsequent to the transaction, the parties to the Master Agreement have agreed on a reversal clause for the benefit of the Company and its bankruptcy estate for a period of 90 days after the Transaction.