French offshore support vessels provider Bourbon has signed an agreement with China’s ICBC Financial Leasing as part of its “Stronger for longer” action plan, which is meant to tackle the company’s debt problem.
In parallel with recent negotiations that have led to the rescheduling of a large part of the company’s debt, Bourbon also reached an agreement to restructure the rents payments under the leasing transaction entered into in 2013 and 2014 with ICBC Financial Leasing.
Bourbon explained on Wednesday that this agreement provides a decrease by $240 million of the overall cash payments made by Bourbon for the years 2016 to 2018 in consideration of which there is an extension of two years of the initial bareboat charter period at a rate of 8% together with more favorable commercial terms in favor of ICBC Financial Leasing.
According to the company, this agreement will not have any significant impact on the consolidated financial statements of the group as it will not affect the qualification of bareboat charter of the vessels. Pursuant to IFRS, lease payments will be recognized on a straight-line basis as of the date of the lease term renegotiation and for the remaining lease term.
Jacques de Chateauvieux, Chairman and CEO of Bourbon Corporation, commented: “This agreement is a new milestone of our action plan “Stronger for longer” which is aimed at making Bourbon more resilient in particularly difficult market conditions. Our resiliency also comes from customers’ preference for our vessels and operational performances, our diversified segments of activity and geographical footprint, as well as our local partnerships that improve access to markets. This agreement with ICBC Financial Leasing is a further sign of the support of our financial partners.”
For the year 2016 the company posted a loss of €279.6 million ($296.8M). The shipowner stacked over a hundred of its offshore vessels by the end of 2016 amid reduction in activity in the deep and shallow offshore segments.