I.M. Skaugen seeks new refinancing plan for debt due April 2018

By Marisa Wong

Morgantown, W.Va., Dec. 20 – I.M. Skaugen SE said it has been working on a new overall refinancing plan for its debt facilities maturing in April 2018.

The new plan will need to replace the previous refinancing plan, the goal of which was to pay all creditors in full. However, paying all of the group’s creditors is now less likely due to the unilateral terminations received by a subsidiary in mid-November of six long-term bareboat charters, the company said.

The new plan will involve a potential recapitalizing of the group and the appointment of an arranger. The goals of the new plan will be to strengthen the group’s equity and liquidity base and to protect value for all the I.M. Skaugen stakeholders.

As previously announced, I.M. Skaugen is in the process of completing a business transformation, shifting its focus from long haul seaborne transportation of liquefied petroleum gas/petrochemicals to regional distribution of liquefied natural gas.

Alongside this business transformation, the company has been working on a refinancing plan to make all of its financial lenders and operational leaseholders (of seven vessels) whole over time by securing a financing structure to match its expected future cashflow. Most stakeholders had consented to this original plan.

The company signed agreements with secured creditors and bondholders in May 2017, with all conditions completed by early June 2017. The refinancing extended the debt maturity to April 6, 2018, and allowed the company to move on to the next stages of the refinancing plan, specifically to rearrange the group’s operational leaseholders.

However, on Nov. 16, a subsidiary of I.M. Skaugen unexpectedly received unilateral lease termination notices concerning six of the seven vessels. As a result, that subsidiary now has reduced ability to make any of its counterparties whole, which affects I.M. Skaugen’s ability to do the same.

The group now has reduced on- and off-balance sheet commitments and fewer ships on commercial management on its books. On a positive note, this should enable the company to narrow its focus on its small-scale LNG business.

Questions may be directed to Bente Flo, chief financial officer, at +47 23 12 03 00 / +47 91 64 56 08 or bente.flo@skaugen.com.

I.M. Skaugen is an Oslo-based marine transportation service company engaged in the transportation of petrochemical gases and chemicals.

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