Prosafe puts off flotel delivery amid refinancing efforts
Semi-submersible accommodation vessels operator, Prosafe, on Thursday announced the terms of a proposed comprehensive refinancing that include the deferral of the company’s latest newbuild flotel.
According to Prosafe, if completed, the refinancing will provide greater financial flexibility for the company throughout the period until the end of 2020, including a solid liquidity buffer to weather a prolonged market downturn.
The combined effect of the refinancing, is expected to improve the company’s liquidity by approximately $478 million over a five year period, and reduce the net interest bearing debt by approximately $395 million through 100% conversion of senior unsecured bonds, in addition to the contribution of new equity.
The refinancing includes two share issues; reduced amortisation on all bank facilities until 2020; the conversion of bonds to equity; and an agreement to postpone delivery of the company’s latest newbuild.
Newbuild delivery postponed
As part of and subject to the refinancing, Prosafe has negotiated and agreed with Chinese shipbuilder Cosco a deferred delivery of flotel Safe Eurus to 4Q 2019, or such earlier time required by the company, and a limitation on any further liability in the event Prosafe does not take delivery of the vessel, giving the company increased flexibility and reduced financing risk. The flotel was originally scheduled for delivery in 2016.
According to Prosafe, the intention is to lay up the flotel at the shipyard after technical acceptance.
In addition, Prosafe and Cosco have also agreed a deferral of the repayment of the $29 million seller’s credit to 4Q 2019.
Due to delay in delivery of Safe Eurus, Prosafe agreed with its client Petrobras to swap Safe Eurus contract with its sister vessel Safe Notos, which will start the contract with Petrobras at an earlier date within 4Q 2016.
In addition, the original contract was extended from the original duration of 3 years by an additional 222 days.
Offshore Energy Today Staff