Siem Offshore Gets Breathing Room

Norway-based offshore vessel owner Siem Offshore has received some breathing room after reaching an agreement with its banks.

The company last week warned that the extreme fluctuations in the financial markets over the past weeks „have resulted in a further deterioration in the company's liquidity situation“ and that Siem Offshore was in discussions with its banks to seek to alleviate the situation.

In a statement on Wednesday morning, Siem Offshore said that it had "with effect from 31 March 2020 entered into an agreement with the group's secured lenders to provide time to secure a long-term financing solution for the Siem Offshore group."

The terms of the agreement include deferral and suspension of principal and interest and waiver of financial covenants until May 15, 2020.

In its fourth-quarter report in February, Siem Offshore said its outlook remained cautious for the OSV market in general "as current day-rates do not provide sufficient margin to service debt."

At December 31, 2019, the company's fleet totaled 35 vessels, including partly-owned vessels and one vessel hired on a bare-boat contract. The gross interest-bearing debt at the end of 2019 was $1.0 billion.

The company's contract backlog at the end of the fourth quarter of 2019, was $652 million. Worth noting, Siem Offshore has earlier this month secured a significant contract with Lundin Petroleum in Norway.

Lundin Norway has chartered the dual-fuelled platform supplier "Siem Symphony" to support its 10-well drilling campaign on the Norwegian Continental Shelf.

The firm contract is estimated up to 600 days plus options and the vessel is expected to start operation during the second quarter of 2020.

Worth noting, Solstad offshore, another Norwegian offshore vessel owner, on Tuesday said its creditors had agreed on a draft restructuring plan, which includes converting 10 billion crowns ($962.17 million) of debt into equity.