New companies to be created as part of Solstad refinancing

Solstad Shipholding, a subsidiary of Solstad Offshore, has reached an agreement with Aker, via its wholly owned subsidiary Aker Capital, AMSC, DNB Bank and Export Finance Norway (Eksfin) for an overall refinancing solution which will create a robust industrial platform going forward.

Solstad has, together with Aker, developed and negotiated NOK 9.7 billion (almost $873 million) in new credit facilities, underwritten by DNB and Eksfin, to fully refinance the fleet loan maturing March 31, 2024.

Two Norwegian limited liability companies Solstad NewCo and Solstad NewCo 2 will be established as part of the refinancing where Solstad NewCo will serve as the parent company for the new structure and will in the first instance be wholly owned by Solstad, with no other assets, rights, and obligations than those acquired and assumed in connection with the refinancing.

Prior to completion, Solstad will transfer 100% of the shares in Solstad Shipowning Holding, Solstad Operations Holding and Solstad Management Holding as contribution in kind to Solstad NewCo 2. The shares in Solstad NewCo 2 will immediately thereafter be transferred to Solstad NewCo as a contribution in kind. 

A total of NOK 4 billion of new equity will be raised where Aker will contribute a minimum NOK 2.25 billion and underwrite an additional NOK 0.75 billion to significantly improve the financial position of Solstad NewCo.

According to Solstad, the refinancing entails the establishment of the new structure due to the complex nature of Solstad’s current liabilities, including a residual claim from former lease arrangements with respect to construction support vessel (CSV) Normand Maximus.

In addition, AMSC will contribute 100% of the shares in the entity owning the CSV Normand Maximus valued at NOK 1 billion against receiving new shares in Solstad NewCo. The refinancing will also entail amendments to the terms of the residual claim relating to the former lease arrangement for Normand Maximus, including the extension of its maturity similarly to the maturity of the new credit facilities. 

“The Refinancing will establish a robust industrial platform positioning Solstad NewCo as a global leading offshore operator with one of the most modern fleets of high-end vessels and a healthy balance sheet including NOK 4 billion of new equity,” said Øyvind Eriksen, President and CEO of Aker. 

“The strong market outlook and the immediate deleveraging provides a solid basis for increased value creation with a clear ambition to initiate quarterly dividend payments from Solstad NewCo in 2024.”

Soldstad Offshore will retain around 27% ownership of Solstad NewCo while existing shareholders, excluding Aker, will receive subscription rights to participate in the NOK 0.75 billion tranche of the private placement of new shares, corresponding to around 14% ownership of Solstad NewCo.

Solstad NewCo will consist of 35 anchor-handling tug supply vessel (AHTS) and CSV vessels. Solstad Offshore will retain full ownership of the remaining business consisting of seven high-end AHTS and CSV vessels and 50% ownership in the Normand Installer joint venture together with SBM. 

The components of the refinancing are subject to customary closing conditions. Completion is expected by the end of the year.

“The Refinancing provides a solution to the benefit of all stakeholders in Solstad. This combination will position both Solstad NewCo and the Solstad Group for future growth and shareholder value creation in the projected strong offshore market going forward. Aker has been an instrumental contributor to the Solstad Group from day one and without Aker’s support, both over the past years and going forward, this Refinancing would not have been possible,” said Lars Peder Solstad, CEO of Solstad Offshore

“The refinancing substantially reduces the financial risk to all stakeholders, while preserving as much of the upside as possible. We are happy to put behind us the refinancing, providing a solid foundation for our operations and a basis to both continue deleveraging and to deliver long term shareholder value creation.”

Speaking about Normand Maximus, the vessel was sold from its original owner Maximus Limited to AMSC in the fourth quarter of 2022 and subsequently delivered to a subsidiary of Solstad Offshore under a bareboat agreement for a five-year firm period plus extension options.

Following the refinancing, the Solstad Group will maintain operational control of the vessel while the ownership of the vessel will at the same time be part of Solstad NewCo. In addition, Solstad NewCo will assume the senior secured debt related to CSV Normand Maximus, which, as part of the transaction, will be refinanced on similar terms as the senior secured financing.