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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

BMT Delivers CFD Study for FPSO

BMT Fluid Mechanics (BMT), a subsidiary of BMT Group Ltd., completed a Computational Fluid Dynamics (CFD) study for an oil major operating offshore Nigeria. BMT

BSEE, USCG on Sharing Information, Jt Ops

Bureau of Safety and Environmental Enforcement (BSEE) Director Brian Salerno and U.S. Coast Guard Rear Admiral Paul Thomas participated in a luncheon panel discussion

MOL Launches Coastal LNG Transport in Indonesia

Mitsui O.S.K. Lines, Ltd. (MOL; President & CEO: Junichiro Ikeda) today teamed up with a local partner in Indonesia, PT Pelindo Energi Logistik (PEL; President

Finance

NOL Posts Q1 Net Loss of $105 Mln

NOL Group reported a first quarter 2016 net loss after tax of $105 million. Core EBIT (Earnings before Interest, Taxes and Non-Recurring Items) for the period was a loss of $84 million,

US Aims to Recover El Faro VDR in Next Few Months

The U.S. National Transportation Safety Board hopes to recover the voyage data recorder from the cargo ship El Faro, which sank during a hurricane killing all 33 crew on board,

Ships Idled as Greeks Strike Again

Policy reforms required to meet bailout terms; parliament expected to measures on May 8. Greeks started a 48-hour nationwide strike on Friday in anger at tax

 
 
Maritime Contracts Maritime Standards Naval Architecture Pipelines Pod Propulsion Port Authority Salvage Ship Simulators Sonar Winch
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: 0.0942 sec (11 req/sec)