Oceanteam chairman: Refinancing proposal only way to avoid bankruptcy

By Caroline Salls

Pittsburgh, April 10 – Oceanteam ASA chairman Diederik Legger said in a letter to shareholders sent ahead of an April 13 extraordinary general meeting that a proposed refinancing “is the best and only alternative available to the company at the moment to avoid a bankruptcy,” according to a news release.

Legger said Oceanteam has been facing substantial financial, legal and managerial challenges for some time.

Among other factors, the chairman said the company’s position became difficult in 2017 as a result of it not being allowed by the bank lenders of Oceanteam Bourbon 101 AS and Oceanteam Bourbon 4 AS to upstream dividends to their parent companies.

“Currently the company can therefore not fund its business operations from it shipping business,” the letter said.

Legger said the banks have not permitted dividends for a number of reasons, including the weakness of Oceanteam’s financial position.

According to the letter, the only other source of cash flow available to the company is from its solutions business, but the positive cash flow from that business is not sufficient to fund the total cost of Oceanteam’s operations.

“As you can imagine there are a number of pieces that need to be put in place if a bankruptcy is to be avoided,” Legger said. “The most important piece is ensuring that the company has a solid financial platform to continue its operations.”

The chairman said the refinancing proposal is the only solution that ensures that the company reduces its debt and secures new funding.

In addition, Legger said the proposal will ensure that the current shareholders of Oceanteam retain an equity stake of 4% in the company. If the company is forced to file bankruptcy Legger said shareholders will receive nothing.

Legger said the proposed solution requires the support of two-thirds of the shareholders and bondholders and requires the company to settle outstanding issues with former board members and its former chief executive officer.

The chairman said the proposal has the support from the required number of bondholders, and therefore the only outstanding issues to be settled are the discussions with the previous board members and CEO and that the required majority of the shareholders vote in favor of the proposal at Friday’s meeting.

Oceanteam consists of two operating segments – Oceanteam Shipping and Oceanteam Solutions. Oceanteam Shipping owns, charters and manages deep-water offshore support vessels and fast support vessels. Oceanteam Solutions provides offshore solutions. The company is based in Bergen, Norway.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.