Skudeneshavn, Norway, headquartered Solstad Offshore ASA reported yesterday that a majority of its creditors — including secured lenders, leasing companies, industrial shareholders and key bondholders — have established a common plan to finalize negotiations on the basis of a restructuring outline.
Under the outline, on completion of the restructuring, the company’s existing shares will represent 0.4%, and converted debt will represent at least 65-75% of the company’s shares.
Under the outline, approximately NOK 10 billion (about $971 million) of debt will be converted into equity. The debt converted to equity consists of secured debt, leasing obligations, bond obligations and other unsecured debt. All debt converted to equity will have the same conversion rate.
The group’s fleet will be refocused and 37 vessels of its older and less sophisticated vessels will be sold or scrapped over a period of time. The long term business of the group will be based on a core fleet of approximately 90 vessels.
Existing industrial shareholders including Lars Peder Solstad and companies controlled by him will continue to support the company, and will be offered to subscribe for shares so as to retain an ownership of up to 1/3 of the shares in the company on completion of the restructuring. The shares to be subscribed by the industrial shareholders will be subject to a lock up period. The remaining shareholders will be offered to subscribe for shares so as to retain a total ownership of up to 2%. The total subscription amount for the shares in consideration for cash (to represent up to 35% of the shares of the company uon completion of the restructuring) will be up to approximately NOK 70 million (about $6.8 million).
“Passing this milestone means that we continue to operate Solstad Offshore ASA in a controlled manner in these challenging times, with predictability for our employees and clients word-wide. The discussions with the stakeholders are constructive and we look forward to work with the parties with a view to agree on the restructuring over the next weeks,” says CEO Lars Peder Solstad.