Siem Offshore Inc. (“the Company”) has on 26 May 2020 entered into an agreement with the group’s secured lenders in Europe and Norway for a standstill agreement for the period from 29 May 2020 until 30 April 2021. The terms of the agreement includes 100% deferral of principal and interest until the end of the standstill period. The agreement also includes a waiver of financial covenants, including loan-to-value provisions. The Company has similar discussions ongoing with the secured lenders in Brazil and Canada, and the standstill agreement is conditional on agreement with these banks.
The standstill agreement is further conditional upon reaching an agreement with the bondholders of the NOK350 million senior unsecured bond (SIOFF01) due 30 October 2020 and the NOK760 million senior unsecured convertible bond (SIOFF02) due 4 November 2023, to defer payments and suspend acceleration rights until the expiry of the deferral period on 30 April 2021.
The standstill agreement will improve the Company’s cash flow and liquidity and secure sufficient cash to operate the fleet in a challenging offshore market with possible down time caused by covid-19, during the next 11 months. The intention is for the Company and its lenders to use the standstill period to agree a long-term plan to take the Company through the prolonged downturn and preserve the earnings capability to allow for repayment of debt when the market recovers.
Source: Siem Offshore