After sending its last active vessel to layup in October, offshore service vessel company World Wide Supply (WWS) is facing a ‘major financial risk’ due to a breach of its obligations under the loan agreement.
According to its 3Q 2016 report on Friday, WWS is confronting a ‘major financial risk’ as it has not paid interest to its lenders since August 2015. The lenders have, in spite of the default, asked the board and management to continue the operations of the company and not file for bankruptcy.
WWS said that this default has not been waived by the lenders but they have agreed to leave interest falling due as unpaid until further notice. Since the company is constantly taking on new debt in form of new trade creditors, the lenders have agreed to allow the company the use of its cash to pay these, even in the case of an enforcement of the securities.
World Wide Supply also said on Friday that its net operating income nearly halved during the third quarter totaling NOK 34 million, compared to NOK 62.8 million in the prior year quarter.
WWS has six platform supply vessels (PSVs), all of the same Damen PSV 3300 CD design. By the end of the quarter, five of those six vessels were in layup brining the company’s average utilization of the fleet in the third quarter to 25.2%.
To remind, after its PSV World Emerald was redelivered at the end of August and laid up in Spain and after the World Sapphire was redelivered in October, now en route to Spain for layup, WWS was left with no active vessels in the fleet. Its other four vessels have previously been laid up.
The company noted it is facing a long period of depressed market rates with approx. 500 OSVs in layup globally and approx. 100 OSVs in layup in the North Sea. As investment budgets for the oil companies are still being reduced contracting the demand for oil service assets, WWS said it does not expect any consistent market improvement for several years.
Offshore Energy Today Staff