Havila Shipping has hammered out a revised financial restructuring plan that needs to be approved imminently as the struggling Norwegian offshore vessel owner struggles to stay afloat in a sinking market.
The Oslo-listed owner, which admits it is in a “highly challenging” financial position, has rehashed a plan issued last month following “extensive dialogue” with bondholders in recent weeks, with implementation of the restructuring “imperative for continued operations”, according to a statement.
The revisions mainly cover amendments to the company’s so-called HAV108 bond loan and have been given the backing of major lenders within all three of the bond arrangements covered by the plan, according to Havila.
Under the revised plan, Havila will be required to make a cash payment of Nkr4.5 million ($525.4 million) to cover interest on the HAV108 loan for each of the years from 2016 to 2018 inclusive.
In addition, a proposed equity issue through a private placement will be increased from Nkr200 million to Nkr300 million so that interest payments can be covered.
The company has also pledged to buy back HAV108 bonds up to a total par value of Nkr275 million, at a price of up to 30% of par value, with settlement in cash on completion of the refinancing.
Furthermore, the Saevik family-owned holding company Havila Holding will subscribe for newly issued shares worth Nkr153 million to maintain its current proportionate shareholding.
The new so-called master agreement has a tight deadline of 15 February for approval by bondholders after Havila failed to gain backing for a postponement in line with other bondholder meetings scheduled around 26 February.
As a result, the company said it will need to get pre-acceptances from other bondholders by the deadline to secure approval of the proposed pact.
“Should the company fail to receive the necessary pre-acceptances from bondholders by 15 February, the master agreement will expire,” Havila stated.
“In such case, the board and management of the company are forced to evaluate the company's options, including the viability of further negotiations with its creditors.”