Solstad Offshore ASA (the "Company") and its subsidiaries ("SOFF" or the
"Group") have since Q3 2018 worked with their creditors towards a consensual
financial restructuring. During the restructuring process, SOFF has had
constructive discussions with all stakeholders.
SOFF is pleased to announce that a large majority of the stakeholders, including
secured lenders, leasing companies, industrial shareholders and key bondholders
have established a common plan to finalize negotiations on the basis of a
restructuring outline to the benefit of all stakeholders (the "Restructuring
Outline"). As such, the relevant stakeholders have confirmed their intention to
work together to enter into a binding agreement based on the Restructuring
Outline within end of April 2020.
"Passing this milestone means that we continue to operate Solstad Offshore ASA
in a controlled manner in these challenging times, with predictability for our
employees and clients word-wide. The discussions with the stakeholders are
constructive and we look forward to work with the parties with a view to agree
on the restructuring over the next weeks" says CEO Lars Peder Solstad.
The Restructuring Outline is based on the following main components:
· Approximately NOK 10 billion of debt will be converted into equity. The debt
converted to equity consists of secured debt, leasing obligations, bond
obligations and other unsecured debt. All debt converted to equity will have the
same conversion rate.
· The Group's balance sheet and liquidity will be notably strengthened.
· The Group's financial and company structure will be simplified. Apart from
certain ring-fenced structures, surviving secured debt of the Company will be
included in a fleet loan maturing after four years.
· The SOFF 04 bonds will receive a fee of NOK 50 million financed by new
equity, and the residual claim will be converted to equity in the Company.
· The bondholders in Solship Invest 1 AS will be repaid an amount equal to
Solship Invest 1 AS corporate cash (which amounts to approximately NOK 26
million). The residual claim will be converted to equity in the Company.
· The Group's fleet will be refocused and 37 vessels of the older and less
sophisticated vessels are envisaged to be sold or scrapped over a period of
time. The long term business of the Group will be based on a core fleet of
approximately 90 vessels.
· Termination agreements in respect of the leasing agreements for the five
vessels owned by subsidiaries of SFL Corporation Ltd. have been entered into.
SFL will receive a cash fee of NOK 10 million.
· The leasing agreements for two vessels owned by a subsidiary of Ocean Yield
ASA, F-Shiplease AS, will be replaced by new lease agreements on amended terms.
The charter rate payable under the new lease agreements shall be a reference
rate equal to the average per vessel EBITDA in a pool of seven similar UT731
design vessels. F-Shiplease AS will carry all upside/downside from the operation
of its vessels during the charter period.
· Upon completion of the restructuring, the existing shares will represent
0.4%, and the converted debt will represent at least 65-75% of the Company's
· Existing industrial shareholders including Lars Peder Solstad and companies
controlled by him will continue to support the Company, and will be offered to
subscribe for shares so as to retain an ownership of up to 1/3 of the shares in
the Company upon completion of the restructuring. The shares to be subscribed by
the industrial shareholders will be subject to a lock up period. The remaining
shareholders will be offered to subscribe for shares so as to retain a total
ownership of up to 2%. The total subscription amount for the shares in
consideration for cash (to represent up to 35% of the shares of Company upon
completion of the restructuring) will be up to approximately NOK 70 million.
The components of the Restructuring Outline are subject to credit and internal
approvals with the stakeholders.
Furthermore, relevant companies within the Group have today agreed with key
financial creditors, including most of the Group's secured lenders, F- Shiplease
AS, SFL Corporation Ltd, Vard Group AS and Sterna Finance Ltd for a further
extension of the relevant suspension agreements until 30 April 2020. One secured
creditor to subsidiaries of Solship Invest 1 AS has not agreed to extend the
current standstill period, and the relevant subsidiaries have declared a
unilateral standstill pending the outcome of the negotiations. A subsidiary of
Solship Invest 3 AS maintains its unilateral standstill towards one creditor.
Moreover, the current suspension period in SOFF 04 and a waiver period in the
Solship Invest 1 AS bond expires today. This means that as of 1 April 2020 there
will be a breach under the terms of the bond loans in the Group. However key
bondholders have already confirmed their support to the restructuring and have
agreed to vote in favor of the solution contemplated by the Restructuring
Outline provided that certain milestones are met. The Group therefore expects
that the bonds will be restructured on the terms of the Restructuring Outline as
set out above.
"We are entering a period where global offshore activity is likely to be reduced
with the impact of the Covid-19 virus and drop in the oilprice. A successful
implementation of the restructuring will enable the Company to better meet the
challenges of the current markets and position the company well for the coming
years" says CEO Lars Peder Solstad.
Skudeneshavn, 31 March 2020
Lars Peder Solstad CEO, at +47 91 31 85 85
Anders Hall Jomaas CFO, at +47 40 04 29 18
Solstad Offshore ASA
This information is subject of the disclosure requirements according to the
Norwegian Securities Trading Act section § 5-12.