Prosafe and Floatel give up on merger plans amid financial uncertainty
Offshore accommodation specialists Prosafe and Floatel have decided to abandon their merger plans amid financial uncertainty and regulatory objections. The merger would have created the world’s largest offshore accommodation company.
Prosafe and Floatel International said on Thursday they had mutually decided to discontinue the merger process due to financial uncertainty and process risk.
“The regrettable conclusion is that any near term completion of a value enhancing merger is unlikely,” the two companies said.
It is worth reminding that in late January competition authorities in the UK found that blocking the merger between Prosafe and Floatel might be the only way to mitigate concerns related to lessening of competition and fears that customers might face higher prices as a result of the merger.
In October last year, the Norwegian Competition Authority also rejected the proposed merger between the two companies.
Prosafe also provided information related to its talks with lenders and said the discussions “remain constructive.”
Pending conclusions, Prosafe has received consent from all lenders to further defer payments of scheduled instalments and interests under both its $288 million and $1,300 million facilities until March 31, 2020.
The temporary waivers for certain other identified defaults in the period have also been similarly extended. Payment of the final instalment owed and due under the seller credit to Cosco for the Safe Notos, remains as reported on January 14, 2020, subject to ongoing discussions with Cosco and the lenders.
Namely, Prosafe said in Janaury it had missed its final payment to China’s Cosco shipyard for the Safe Notos flotel amid talks with lenders meant to secure financial flexibility for the longer term.
Prosafe also said on Thursday that the unanimous deferrals and waivers would provide stability for the company, while the company continued to work with the lenders to agree on a long-term financial solution.
Pending this, the company continues to operate on a business as usual basis to protect and create value through challenging market conditions, Prosafe concluded.