DOF Subsea Desperately Seeking Funds

Laxman Pai
Wednesday, June 26, 2019

Norwegian offshore support vessel owner DOF Subsea is seeking a revision of debt terms with creditors as it struggles to achieve a refinancing solution.

The cash-strapped subsidiary of Oslo-listed DOF Group has launched a bid to align bond and loan covenants as its refinancing continues. The shipping company is also looking to change loan agreements.

The company said it has called a bondholders meeting for its three series maturing in 2020, 2022 and 2023.

"The events have highlighted the need to align loan covenants as much as possible, as DOF Subsea AS currently has deviating requirements for minimum cash in several of its bank debt agreements and for its bond loans. Consequently, DOF Subsea AS wants to align the DOF Subsea Group’s liquidity covenants for all its debt facilities including the bond loans," said a press note from the company.

DOF Subsea is requesting that all its minimum cash covenants are aligned to be measured using the proportional consolidation method (management accounts), which implies a change for bonds to the method already applied by banks, with a common threshold of NOK 400 million ($47 million) and a reduction from NOK 500 million ($59 million) for certain banks.

The proposal and the background for the proposal is further described in the summons to the bondholders in the three bond loans. A similar request is made to banks where required to align the cash covenants.

Provided that all the required changes are approved, the group said it believes that it has established a satisfactory short-term platform, which may contribute to finding a long-term financing solution for the group together with the relevant stakeholders.

Categories: People & Company News Legal Finance Subsea Vessels

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