Offshore accommodation rig provider Prosafe said Friday it had received support from lenders of its affiliated companies Prosafe SE and Prosafe Rigs Pte. Ltd. on debt restructuring proposal.
"The company has received acknowledgment of credit approval (subject to certain conditions) in support of the Transaction from ca. 79% across the USD 1300 million facility and the USD 144 million facility with additional credit approvals expected by mid-June 2021,2 the company said.
Prosafe said the agreement would result in significant de-leveraging of the balance sheet "with ca. 75% debt reduction, a corresponding reduction in annual debt service, a sufficient cash balance and in sum a significantly improved balance sheet and improved financial flexibility."
The agreement includes circa $1,1 billion million of total debt reduction, with the final amount subject to timing of closing and accrued interest to that date and the reinstatement under the $1,3 billion million facility and the $144 million, facility of $250 million and $93 million, respectively.
Further, Prosafe, which provides offshore accommodation services to oil and gas companies, will get a significant runway with no mandatory debt maturities until December 2025.
The company also expects reduced interest costs, with around $9 million in annual debt servicing costs post-transaction.
To implement the proposed restructuring, Prosafe said that if it does not receive unanimous support for the restructuring from all stakeholders, the company intends to implement the transaction using "a Singapore Scheme of Arrangement combined with other arrangements if required."
The transaction will also require approval from the Company's shareholders in an extraordinary general meeting.
Jesper K. Andresen, Prosafe's CEO says, "The support for a comprehensive restructuring from our lenders is a key milestone in the process to implement a sustainable financial solution."
"We are pleased to have achieved this consensually among our lenders which reflects the strong support we have enjoyed from them throughout the process and which has enabled us to continue our business as usual and protect and generate value.
"Pending remaining credit approvals and a possible Singapore Scheme of Arrangement combined with other arrangements to complete the implementation, Prosafe will continue to position the company and focus on protecting and creating value for all its stakeholders," he said.