Norwegian offshore vessel owner Farstad Shipping, looking at ways to weather the storm caused by low oil prices, might have found a solution in Siem Industries.
Farstad, the owner of 57 offshore vessels, has been working on various options to enhance its financial position in order to enable long-term operations for the company.
Hundreds of offshore support vessels have been laid up since the oil prices started to fall down in mid-2014, reducing offshore activity and impacting shipowners strained by financial covenants.
In a statement on Friday, the company said it entered into a non-binding letter of intent with Siem Industries for the financial restructuring, with Siem or a fund managed by Siem as a key equity investor.
“In accordance with the letter of intent, Farstad Shipping ASA and Siem are continuing the company’s discussions with key stakeholders of the Farstad Shipping group with a view to find a solid financial platform for Farstad Shipping ASA’s continued operations,” Farstad said.
According to reports, there are currently more than 500 offshore vessels laid up around the globe, with around a 100 in the North Sea alone.
A few months ago, presenting its second-quarter results at the end of August 2016, Farstad said there were no near signs of improvement in the offshore support vessel market. It then said that its going-concern assumption was depending on the company reaching agreements with creditors on reduced repayments and postponed maturities in order to improve the cash position.
Offshore Energy Today Staff