DOF ASA: New board, new restructuring proposal
Written by Nick Blenkey
Leading Norwegian offshore services provider DOF ASA is to make another attempt at getting a restructuring plan in place. This is the latest development in the chain of events set in motion when shareholders rejected a proposal put to them at a November 11, 2022 extraordinary general meeting. That led to the company filing for reconstruction with the Hordalund district court and subsequently electing a new board of directors.
The new board immediately went to work on getting an overview of the company’s situation, including in particular valuations and assessments of liquidity and future cash flow. In parallel, it investigated whether it might be possible to get agreement on any better deal for shareholders from the financial creditors for any alternative solutions, including refinancing of the debt, the sale of ships and a share issuance.
“Unfortunately,” says the board, “none of these solutions have been possible to realize.”
Before putting its new proposal to shareholders, the DOF board will have to get it approved by both its creditors and the reconstructor appointed by the court, Egil Horstad, a partner in the Schjødt law firm.
The board says that while its new restructuring plan is considered by its financial creditors it will work to document support for the plan from a sufficient number of shareholders. It says the plan has already received support from Møgster Offshore AS, which owns approximately 31.6% of the shares in DOF ASA.
The restructuring proposal is based on the restructuring agreement voted down by shareholders on November 11, 2022.
The original proposal would have meant that shareholders would own 4% of the shares in the company. After this proposal was voted down, says the board, it was likely that the shareholders would end up with a 1% stake.
The new proposal means that the existing shareholders will own 3.75% of the company’s shares after debt conversion. The proposal is otherwise identical to the previous proposal.
“If the proposal is not adopted,” says the board, “there will be no prospect that the company will be able to achieve a reconstruction and the court will probably open bankruptcy after a report from the reconstruction committee. The business will continue to operate as today through the subsidiary DOF Service AS and its underlying companies. However, shareholder value will in all likelihood be lost.”
In an Oslo Stock Exchange filing, the DOF ASA board goes into more bleak details of what could lie ahead should its proposal fail. You can read the filing HERE
