Solstad completes refinancing

Solstad completes refinancing

Solstad Shipholding, part of Norway’s Solstad Offshore (SOFF), has completed refinancing which is expected to create a robust industrial platform going forward.

Normand Maximus. Source: Solstad Offshore

The completed refinancing includes equity contributions to Solstad Maritime Holding (SMH) of NOK 4 billion (around $384.2 million) in total, consisting of a NOK 2.25 billion contribution and a NOK 750 million underwriting commitment from Aker Capital, plus NOK 1 billion contribution-in-kind from AMSC for the acquisition of 100% of the entity owning the construction support vessel (CSV) Normand Maximus.

“The Board has throughout the refinancing process done its utmost to safeguard the values of the Solstad Group for the benefit of all its shareholders and creditors. The Board remains convinced that the Refinancing represents the best available alternative to safeguard shareholder values,” said Harald Espedal, Chairman of Solstad Offshore.

“I cannot stress strongly enough that no shareholder or other third party to date has presented a fully financed alternative solution to Solstad Group’s NOK 13.2 bn financing needs which matures in two-and-a-half months. In addition, the market has confirmed that it is a good solution for the company.”

To remind, Solstad reported in October 2023 that Solstad Shipholding had reached an agreement with Aker, AMSC, DNB Bank and Export Finance Norway (Eksfin) for an overall refinancing solution.

It was announced that two Norwegian limited liability companies Solstad NewCo and Solstad NewCo 2 would 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.

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“The importance of this successful refinancing should not be underestimated by our approximately 13,000 shareholders and 2,500 employees. Through this process, we have secured a refinancing that repays our creditors and preserves values for all our shareholders,” said Lars Peder Solstad, Solstad Offshore’s CEO.

“Aker, who has been a supportive shareholder since 2016, has been the key to this. We can now look forward to a fresh start from a robust financial platform that will allow us to capitalise fully on a projected strong offshore market going forward.”

The refinancing builds on the ring-fenced corporate structure that was established when Solstad Group was restructured in 2020. The key entities that were previously part of the security package for the benefit of the lending banks will going forward be part of SMH. All previous guarantees and pledges provided by Solstad Group to the entities in the SMH Group have been released.

Solstad Group and SMH Group have entered into agreements for the provision of services between each other.

In conjunction with completion of the refinancing, the warrants to subscribe for shares in Solstad Shipowning Holding, Solstad Operations Holding and Solstad Management Holding granted to Aker to secure completion of the refinancing will be canceled.

SMH is currently owned 47.4% by Aker, 31.6% by SOFF (indirectly via Solstad Shipholding) and 21.1% by AMSC. Final ownership in SMH will change following the completion of a NOK 750 million share offering. The offering is fully underwritten by Aker and is expected to be completed during Q2 2024, subject to the publication of an offering prospectus. Fully subscribed this tranche will own 13.6% of SMH.

Total transaction value is estimated at NOK 5.5 billion. The transaction is expected to result in a negative accounting effect for SOFF as of the date of closing, primarily due to USD/NOK currency fluctuations between signing and closing.

Pareto Securities acted as the financial adviser and Wikborg Rein acted as legal adviser to SOFF in the refinancing process.

In terms of most recent news coming from the company, Solstad announced last week that it had placed an order with compatriot Omega Subsea Robotics for the delivery of six additional remotely operated vehicle (ROV) systems that will be integrated onboard its selected vessels this year.