Olympic gets yet another stand-still extension

  • Equipment

Olympic Ship AS, an offshore vessel owner based in Norway, has reached yet another extension with creditors to a previously agreed stand-still deal.

The financially strained ship owner was in talks with the secured lenders aiming to secure adjustment to the repayment profile of the financial debt of the company and its subsidiaries.

This is now an eighth extension to the original standstill agreement reached in July 2016.

On Tuesday, November 29, 2016, Olympic Ship said that in order to provide further time to secure a long term solution, “the company has now been granted an extended stand-still from the Secured Lenders up to and including 30 November 2016.”

As part of the stand- still agreement, the group will continue to pay interest to the finance providers and the secured lenders have agreed to postpone all amortization and maturities during the stand-still period.

However, Olympic Ship said that despite this support from creditors, and the talks being held, “no guarantee can be given that a solution can be found with the relevant stakeholders in a timely manner.”

It also said that, even with the continued support, it might from time to time be in breach of certain of the covenants in its financing agreements.

“The liquidity of the Group remains stable for the period to come in anticipation of an amended financing arrangement,” the company said.


Locals willing to invest


In mid-October, Olympic Ship, said that a consortium of local investors was willing to invest into the business of the restructured Olympic group of companies.

Subject to certain terms and conditions, including the successful completion of the discussions with the finance providers and board approval of the investors, the consortium is willing to invest approximately NOK 500 million, out of which approximately NOK 400 million is new liquidity.

The investment is contingent on a restructuring of the Group, which needs to be agreed with the finance providers.

Companies controlled by the main shareholder of the Company, Stig Remøy, are among the investors in the consortium, while the remaining parties in the consortium are investors with direct or indirect connection to the maritime cluster in Sunnmøre, Norway.

At the time, CEO Stig Remøy said: “I am happy with the fact that we after a comprehensive process have succeeded in establishing a local consortium that believe in Olympic and the fleet of Olympic. It is very positive that the maritime cluster in Sunnmøre again proves its ability to find local solutions.”



Not the only one struggling


Olympic Ship AS has been struggling as the offshore support vessel market has been plagued by low oil prices, lack of demand and vessel overcapacity. According to reports, some five hundred OSVs are currently laid up, worldwide.

Olympic, which is yet to report its third quarter results, in August posted a net loss of 630 million NOK for the second quarter 2016. The result was impacted by Olympic recognizing write-downs on vessels and financial investments in total of 600 million NOK, citing the uncertainty in the current market.

With the lack of demand in its main market, the offshore oil and gas, Olympic has turned in part to renewables, where it sees increasing demand for its subsea and construction vessel. Olympic owns a fleet of twenty-three offshore vessels, of which nine subsea, and two offshore construction vessels.

The company’s Olympic Ares subsea construction support vessel, hired by Bibby Offshore, is currently being used for the installation of MeyGen tidal turbines in the Pentland Firth, off Scotland.

Last year, the company’s Olympic Zeus offshore construction vessel was involved in an installation of a wave energy buoy, offshore Norway.

Worth noting, Olympic Ares is not the only Oslo-listed offshore vessel owner under pressure.

Its compatriot and rival Havila Shipping, after extensive negotiations, on Monday received support for its restructuring proposal, regarded as the only viable alternative to bankruptcy.

Last week, on Thursday, Alesund-based Farstad Shipping, signed a binding term sheet to complete a restructuring it’s been working on for months. This will will lead to Siem Industries owning 50,1% of the shares in Farstad, post restructuring.

Also in November, a Swedish-based Viking Supply Ships, also listed in Oslo, avoided bankruptcy after reaching a deal with creditors, concluding its financial restructuring. The company said this would provide it with a stable financial platform until 2020, a year expected by some (wishful thinking?) will see a pick-up in the offshore oil and gas activities and oil prices.

Offshore Energy Today Staff

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