Norwegian offshore vessel owner Eidesvik Offshore has agreed a term sheet with its lenders but says it needs to raise new equity as part of the deal.
In order to reduce the amortisation of its secured loans and facilitate a runway through 2022 the company will need to obtain at least Nkr120M (US$15M) in new equity. Another condition of the term sheet is that the company’s Nkr30M shareholder loan is converted to equity.
In a statement Eidesvik said “Despite the company's cash position in the short term, the severe downturn in the market has made it necessary to renegotiate financing terms in line with similar financial restructurings in the offshore industry.
“On this basis, the company has negotiated and agreed upon a term sheet with its secured lenders for a refinancing solution.” The solution covers the period until 31 December 2022.
The refinancing is subject to completion of the private placement and debt conversion and the satisfaction or waiver of a number of other conditions.
After completion of the refinancing, the company will have to meet reduced installments through 30 June 2021 and normal installments from 1 July 2021 to 31 December 2022.
In recent months, the company has sold vessels to reduce net interest bearing debt from Nkr3.6Bn in the first half 2015 to Nkr2.1Bn as per Q3 2017.
The company is contemplating a private placement of 24,000,000 new shares at an offer price of Nkr5 per offer share, raising gross proceeds of Nkr120M. The company's largest shareholder, Eidesvik Invest AS, has precommitted to subscribe for shares in the amount of up to Nkr100M.