Norwegian offshore vessel owner Farstad Shipping has gained a further extension of a standstill and deferral agreement of all financial covenants from its lenders hoping for the company’s financial restructuring.
As a first step of the financial restructuring of the Farstad group, Farstad and its lenders entered into a standstill and deferral agreement at the end of June 2016.
The company’s lenders agreed to a postponement of all amortizations of the Farstad group falling due to them in the period from and including July 1, 2016, until October 1, 2016, and a defeasance of all financial covenants during the same period of time. Come October and the parties agreed to extend this agreement pushing it to November 10, 2016.
After the first extension expired, Farstad said in an Oslo Stock Exchange filing on Thursday, November 10 that the parties to the standstill and deferral agreement have agreed to extend the agreement further. Effectively, all amortizations of the Farstad group falling due to the relevant creditors from and including July 1, 2016, have been postponed until December 20, 2016, subject to certain conditions to be met during the course of the standstill period.
Fartsad said: “The extension of the standstill and deferral agreement facilitates and supports the Farstad group’s continued constructive dialogue with investors, strategic partners, and lenders. In parallel, Farstad continues the work to optimize its operating model, fleet composition, and fleet utilization, as well as operating cost improvements.”
Earlier in November, looking at ways to weather the storm caused by low oil prices, the shipping company entered into a non-binding letter of intent with Siem Industries for the financial restructuring, with Siem or a fund managed by Siem as a key equity investor.
Offshore Energy Today Staff