Reach Subsea cuts charter rates with two shipowners, gets new shareholders in return

International subsea service provider Reach Subsea will reduce its charter agreements with two Norwegian shipping companies, Solstad Offshore and Østensjø Rederi, which will in return become new shareholders of Reach Subsea.

Solstad Offshore and Reach Subsea have agreed on changes to the terms for the chartering of the 2014-built construction support vessel (CSV) Normand Reach.

The original contract expires in June 2019 and the changes will take effect from mid-June 2016.

Solstad will receive a significantly reduced charter rate for Normand Reach, in alignment with the current market for such vessels, the shipping company said on Tuesday.

As part compensation for the reduced rate, Solstad will receive a consideration consisting of a cash amount of NOK 56 million, and shares and warrants limited to up to 9,5% of the shares in Reach. The agreement also include a close cooperation between the companies on marketing and chartering of Normand Reach.

The vessel has an overall length of 121 meters, 23 meters beam, 1300 square meters of deck, 7,2×7,2m working moonpool and a 250 ton subsea construction crane. The integrated ROV hangar features handling equipment for both over-side and moonpool launch; enabling ROV launch in high sea states. The vessel has accommodation for 100 people.

Regarding its restructuring, Reach Subsea said on Tuesday: “Although the details of the agreement are confidential between the parties, we can convey that Reach Subsea will be well equipped to handle a prolonged period of weak market conditions. A significant reduction in charter commitments will provide Reach with a competitive and flexible total cost base. Reach Subsea is now positioned to exploit opportunities in the market, and create shareholder value.”

The immediate financial implications for Reach Subsea are:

– Reach’s total off-balance sheet bank guarantees of NOK 87m will be cancelled

– Leasing debt will be reduced by NOK 26m, while bank debt will increase by NOK 20m

– As compensation, the total restricted cash deposits of NOK 53m will be released and paid out

– Reach will issue 15m shares, subscribed at NOK 2 per share, to major shareholders, board members, key employees and the ship owners.

As a result total debt, including bank guarantees, and adjusted for restricted cash deposits, will be reduced from approximately NOK 140m to approximately NOK 95m. The company’s working capital and cash position is unaffected by the restructuring, Reach Subsea noted.

According to the company’s statement, the Board will shortly summon the AGM and will as part of this propose the issuance of 15m shares, all of which have been subscribed for at NOK 2 per share. Five million shares will be issued to each of Solstad and Østensjø, while 5m shares will be issued to major shareholders, board members and key employees. In addition, the Board will propose that 4m options with strike price NOK 3 per share are issued to Solstad Offshore, Reach added.

Jostein Alendal, CEO of Reach Subsea, says: “We are pleased to have achieved a mutually acceptable solution that is adapted to the current market climate. This will enable Reach to continue working with ship owners known for quality and reliability – a necessity in our line of business. We are now equipped to face a prolonged period of poor markets, and will continue to deliver services of the highest quality.”

Offshore Energy Today Staff

Share this article

Follow Offshore Energy Today


<< Dec 2019 >>
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5

Offshore Energy Exhibition and Conference (OEEC) 2020

Offshore Energy addresses the technical, operational and commercial challenges associated with future sector growth.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >


Over the two-day conference, 30 expert speakers will share exclusive insight to help drive well work efficiencies through innovative…

read more >


Looking to fill a job opening?

By advertising your job here, on the homepage of, you'll reach countless professionals in the sector. For more information, click below...


Looking to fill a job opening?

By advertising your job here, on the homepage of, you'll reach countless professionals in the sector. For more information, click below...