Northern Offshore Discusses Financial Situation

Tuesday, May 14, 2002
The Board of Northern Offshore met on May 13th to discuss the company's financial situation. As stated in the company's fourth quarter report the company will need additional financing in order to meet its required short term principal and interest obligations. Total scheduled payments during the next three months include $ 7 million in U.S. Bond interest, $ 11 million in scheduled repayment of the Avalon debt financing, and $ 17 million in repayment of two different loans related to the Energy Searcher. A portion of the payment obligation under the Avalon loan and one of the Energy Searcher loans are already past due, but the Board has negotiated a short-term extension of these repayment obligations. The company currently has a cash position of approximately $ 4 million. Any new financing in Northern Offshore will have to be supported by the cash flows from our two operative rigs, the Energy Searcher and the Northern Producer. The Company has, as of this date, no signed employment for Energy Searcher after expiration of the current INPEX job in August 2002. Management is actively pursuing several short-term employment opportunities. Northern Producer is currently under contract to Texaco at the Galley field until June 2003. Texaco has options to extend this contract. The Board has received several proposals for a refinancing of parts of the company's debt. All of these proposals have assumed that further credit support is required by the company's largest shareholder, Osprey Maritime. The Greenwich Group, which controls Osprey and which also provided the Avalon financing, has been constructive in Northern Offshore's discussions with them. They have, however, expressed the need for finding a long-term solution in exchange for any additional loan commitments or further guarantees.

The board has been unable, to date, to conclude a financing solution that covers the company's short-term liabilities which fall due in the coming months. It is therefore unlikely that the Company will be able to meet the interest payment on the US Bonds when this amount is due May 15th. The Board is however, cautiously optimistic that it will be possible to find a solution and based on that will continue to pursue discussions with commercial lenders and alternative financing sources. The company's goal is to

1. Refinance the Energy Searcher 2. Extend the repayment of the Avalon loan facility; and 3. Secure some additional liquidity in the form of debt or equity. The U.S. Bond Indenture gives the company a thirty day period in order to rectify a non-payment of interest. A significant portion of the company's existing loans may also become due in this thirty day period, if the company is unable to meet its bond interest obligation. This effectively means that a solution will have to be found before June 15th, 2002 in order to secure continued operation in Northern Offshore Ltd.

Maritime Reporter April 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

USCG Rescues Disabled Fishing Vessel

A fishing crew is back on land today after a fouled anchor line stranded them about 115 miles east of Gloucester, Massachusetts, Saturday. Initially, the

MacGregor Inks Deal with Grupo CBO

MacGregor, part of Cargotec, has secured a contract with the Brazilian shipowner and shipbuilder Grupo CBO. The contract is to supply Triplex deck handling equipment

NOAA’s National Saltwater Recreational Fishing Policy Opposed

Recently, NOAA Fisheries released the implementation plan to support the latest National Saltwater Recreational Fishing Policy. The policy, announced at the

Finance

Royal Caribbean Cuts Profit Forecast

Royal Caribbean Cruises Ltd cut its adjusted profit forecast for the year, citing a jump in fuel prices since its January forecast and a strong dollar.   Shares

Baltic Index Up Slightly on Higher Rates for Large Vessels

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, rose slightly on Monday due to firmer rates for the large vessel segments.

ExxonMobil President Seeks Swift Action on US LNG Exports

The United States is at risk of losing economic opportunity and the ability to solidify its role as a global leader in energy production unless the government moves

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Offshore Oil Pod Propulsion Ship Electronics Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1616 sec (6 req/sec)