Norwegian shipowner Farstad and a majority of its secured lenders have entered into a standstill and deferral agreement, the company informed on Monday.
Namely, the relevant lenders have agreed to a postponement of all amortisations of the Farstad group falling due to them in the period from and including July 1, 2016 until October 1, 2016, and a defeasance of all financial covenants during the same period of time.
The Farstad group will otherwise continue its operations in their ordinary course, subject to certain restrictions to ensure the interest of its lenders.
“Farstad, together with its financial and legal advisors, will in the upcoming months work closely with investors, strategic partners and lenders with a view to find a solid financial platform for the long term operations of the group,” the company said in Oslo Stock Exchange filing.
To remind, Farstad Shipping recorded net loss of NOK 2.17 billion in 2015. The company has since 2014 implemented a number of cost-saving measures both onshore and offshore. The company’s branch office in Aberdeen has been closed down, it has carried out redundancies and layoffs among seafarers, sales of older vessels are completed and several vessels are currently laid up in the North Sea region. In addition, the company has also reduced the size of the organization at the office in Aalesund with 26 positions.