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 September 2013 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Drydocks World to Participate in SMM 2014

Drydocks World, the leading provider of maritime and offshore services to the shipping, oil, gas, and energy sectors, will participate in the prestigious 26th edition of Shipbuilding,

SBM Offshore Completes Real Estate Divestment

SBM Offshore is pleased to announce that is has completed the sale and lease back of its Monaco real estate portfolio.  The last of the three buildings was sold

Keppel T & T Appoints Lim Chin Leong to its Board

Keppel Telecommunications & Transportation Ltd (Keppel T&T) has strengthened its Board with the appointment of Mr Lim Chin Leong as an independent, non-executive

Finance

NZ's Lyttelton Port Recommends Offer, to Pay Special Dividend

The board of New Zealand's  Lyttelton Port Co. Ltd recommended minority shareholders accept an offer of NZ$3.95 a share offer from the commercial arm of the Christchurch city council.

A Boost for UK Offshore Drilling? DW Monday Muses

Drilling activity offshore UK is now expected to increase over the next few years as government and industry reacts to the recommendations in Sir Ian Wood’s report

MHI, IHI & DBJ Join Forces On Investments

Mitsubishi Heavy Industries, Ltd. (MHI), IHI Corporation and the Development Bank of Japan Inc. (DBJ) concluded a three-way formal agreement today on their respective

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Pipelines Pod Propulsion Salvage Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1732 sec (6 req/sec)