Farstad Shipping, a Norwegian offshore vessel supplier, does not expect to see an improvement of conditions in the depressed offshore vessel chartering market.
Working on its debt restructuring for months now, Farstad on Tuesday said the previously expected trend change in the oil-price development has not materialized.
“…Hence any related increase in the offshore activity in general is not yet visible or expected in the near future,” the shipowner explained.
Farstad posted a third quarter loss after tax of NOK 350.3 million, compared to a loss of NOK 435.3 million, a year ago.
The company, owning 55 offshore vessels, said the North Sea market for AHTS and PSV tonnage has further deteriorated during 3Q 2016, and is expected to reach a low point over the winter period.
“This looks to be in parallel with the international market condition overall. The number of vessels in layup worldwide is rising, but has not managed to even maintain market balance,” Farstad said.
Outlook for the subsea segment is negatively affected by the cost reductions as well as cancellations and delays of offshore development projects. Also this segment has now fallen into a status of oversupply of tonnage, and rates are consequently affected accordingly, it added.
Farstad has been talking with lenders and pursuing various options in order to strengthen the company’s financial position and capital structure.
The company on November 24 signed a binding term sheet signed with Siem Oil Service Invest Limited which will provide the company with NOK 1 billion in new equity, subject to certain conditions.
The agreement is subject to reaching satisfactory agreements with the creditors, in particular the secured lenders. According to Farstad, a substantial majority of the secured lenders have, subject to customary conditions, agreed to the term sheet, and the board has concluded that going concern is a realistic assumption.
Offshore Energy Today Staff