Farstad stops paying creditors as Siem term sheet lapses

Norwegian offshore vessel owner Farstad Shipping is yet to complete its restructuring.

As part of the restructuring efforts the company in November signed a binding term sheet under which Siem Oil Service Invest Limited would provide the company with NOK 1 billion in new equity.

However, the struggling shipowner on Tuesday said the term sheet with Siem had formally lapsed.

Despite the term sheet lapsing, the company said that Farstad and Siem “continue their joint efforts to obtain a solid financial platform for the operations of the Farstad Shipping group.”

“Constructive discussions are currently being carried out with all affected creditors,” Farstad said in an Oslo stock exchange filing.

The company also said that, starting on Tuesday, it would stop service of interest and amortizations to its financial creditors in order to preserve the liquidity.

“A vast majority of the financial creditors have in support of the ongoing restructuring confirmed that they will not enforce payment against the Farstad Shipping group in the current situation. The Farstad Shipping group will otherwise maintain operations as a going concern. All suppliers and trade creditors will be paid in their ordinary course,” Farstad said.

Farstad’s fleet consists of more than 50 various offshore vessels, providing services to the international oil and gas industry. With the oil prices going down in 2014, many offshore services providers have found themselves in a tight spot, with falling demand, dayrates and revenues, not at all helped by an oversupply in the OSV market.

Presenting a third quarter loss in November, Farstad said that any increase in the offshore activity “is not yet visible or expected in the near future.”

Following its gloomy take for the offshore oil and gas market future, the company has recently started looking at other industries as well.

Early in December, Farstad Offshore, secured a contract for the complete mooring installation and hook-up of Ocean Farming’s semi-submersible offshore fish farm. More here: https://bit.ly/2gHZiF7

Offshore Energy Today Staff

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Posted on December 20, 2016 with tags .

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