Floatel accounts blocked. Debt payment put off until mid-June

Floatel International, a provider of offshore accommodation rigs, has entered into an agreement with bondholders for an extension of a forbearance agreement until 15 June 2020.

Floatel said on Tuesday that
it would not make relevant payments at present and that the forbearance agreement
extension would provide all parties with sufficient time to negotiate terms
with its stakeholders for a longer-term solution for the company.

The extension was agreed with an ad hoc committee of 1L bondholders which hold over 56 per cent of those outstanding bonds. The 1L Bonds are 9 per cent senior secured $400 million 1st Lien bonds. Floatel is also the issuer of 12.75 per cent $75 million 2nd Lien bonds – or 2L Bonds.

The company is also the borrower under a $150 million term loan bank vessel facility and revolving credit facilities (RCF) for an undrawn total amount of $100 million.

On 14 April 2020, the company
entered into a forbearance and deferral agreement with the committee until 18
May 2020, concerning payments of amortisation, interest and commitment fees due
under the bank vessel facility and RCFs, and coupon payments due under the bonds.

Floatel added that it was pleased
to start discussions with an ad hoc committee of 2L Bonds holders.

It is worth noting that, as
part of the discussions with the lenders under the bank vessel facility, the lenders
blocked certain earnings accounts related to Floatel Endurance.

The earnings accounts remain blocked;
however, arrangements are being made that certain expenses related to the
Endurance and the banks collateral should be covered by proceeds in the blocked
accounts.

Floatel stated that the lenders
confirmed in writing that they support the company and do not intend to take
any further action at this time. The company’s vessels and business continue to
operate as normal.

It is worth reminding that Norwegian oil major Equinor extended the charter for the Floatel Endurance just last month.

Equinor and Floatel
International agreed to extend the firm period for the accommodation rig,
currently working at the Martin Linge field off Norway, until the end of
January 2021. Equinor also has the option to extend the charter further.

The Floatel Endurance has
been working for Equinor on the Martin Linge field since November 2019 when it
replaced Floatel Superior.