16.01.2024
Refinancing of Solstad Offshore successfully completed
Skudeneshavn, January 16, 2024 – Solstad Offshore ASA (“SOFF” and, together with its subsidiaries, the “Solstad Group”) is pleased to announce that its subsidiary Solstad Shipholding AS has successfully completed the refinancing as outlined in the stock exchange announcement dated 23 October 2023 (the “Refinancing”).
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.
IMPORTANCE OF THE REFINANCING:
• Successful refinancing of Solstad Group’s NOK 11.4 bn secured debt maturing 31 March 2024.
• Postponed maturity for the NOK 1.8 bn residual claim from the 2020 restructuring.
• Preserves shareholder values in a highly challenging situation for the Solstad Group, through avoidance of reconstruction, debt conversion and high equity raise dilution.
• Ensures a solid financing solution at attractive terms and creates a robust industrial platform for value-creation for all shareholders going forward.
“The Board has throughout the refinancing process done its utmost to safeguard the values of the Solstad Group for the benefit of all its shareholders and creditors. The Board remains convinced that the Refinancing represents the best available alternative to safeguard shareholder values. I cannot stress strongly enough that no shareholder or other third party to date has presented a fully financed alternative solution to Solstad Group’s NOK 13.2 bn financing needs which matures in two-and-a-half months. In addition, the market has confirmed that it is a good solution for the company,” says Harald Espedal, chairman of Solstad Offshore ASA.
The completed Refinancing includes equity contributions to Solstad Maritime Holding AS (“SMH”) of NOK 4 bn in total, consisting of a NOK 2.25 bn contribution and a NOK 750 million underwriting commitment from Aker Capital, plus NOK 1.0 bn contribution-in-kind from AMSC for the acquisition of 100% of the entity owning the CSV Normand Maximus.
“The importance of this successful refinancing should not be underestimated by our approximately 13,000 shareholders and 2,500 employees. Through this process, we have secured a refinancing that repays our creditors and preserves values for all our shareholders. Aker, who has been a supportive shareholder since 2016, has been the key to this. We can now look forward to a fresh start from a robust financial platform that will allow us to capitalise fully on a projected strong offshore market going forward,” says Lars Peder Solstad, CEO of Solstad Offshore ASA.
WRITTEN ACCOUNT OF THE REFINANCING
In December 2023, certain shareholders of SOFF publicly questioned the terms of the Refinancing. Since mid-December, there has been ongoing dialogue between the parties. Key objectives of this dialogue have been to thoroughly explain the complexity of the refinancing requirements for the Solstad Group, the factual details and reasoning related to the different components of the refinancing solution, and the potential consequences of not succeeding with both the various parts and the totality of the Refinancing.
To provide all shareholders with the same level of insight and detail, SOFF’s board of directors has prepared a written account of the Refinancing. This account includes a detailed overview of the Refinancing, the refinancing process, main challenges and considerations, and the reasoning for why Solstad Group opted for the chosen Refinancing solution. The written account of the Refinancing is enclosed to this announcement, in both Norwegian and English language.
SOLSTAD MARITIME HOLDING AS
The Refinancing builds on the ring-fenced corporate structure that was established when the Solstad Group was restructured in 2020. The key entities that were previously part of the security package for the benefit of the lending banks will going forward be part of SMH (“together with its subsidiaries, the “SMH Group”). All previous guarantees and pledges provided by the Solstad Group to the entities in the SMH Group have been released.
The Solstad Group and the SMH Group have entered into agreements for the provision of services between the SMH Group and the Solstad Group, which ensures seamless continuation of the services offered by the Solstad Group also after the Refinancing.
In conjunction with completion of the refinancing, the warrants to subscribe for shares in Solstad Shipowning Holding AS, Solstad Operations Holding AS and Solstad Management Holding AS granted to Aker to secure completion of the Refinancing in accordance with its terms, will be cancelled.
SMH is currently owned 47.4% by Aker, 31.6% by SOFF (indirectly via Solstad Shipholding AS) and 21.1% by AMSC. Final ownership in SMH will change following completion of the NOK 750 million share offering as described below.
SHARE OFFERING AND SUBSCRIPTION RIGHTS
SMH’s board of directors has been authorised to complete an offering of new shares directed towards shareholders in SOFF (other than Aker) as of 27 October 2023 (as registered with the VPS on 31 October 2023), raising gross proceeds of NOK 0.75 billion.
The offering is fully underwritten by Aker and is expected to be completed during Q2 2024, subject to the publication of an offering prospectus. Fully subscribed this tranche will own 13.6% of SMH.
For each SOFF share, 1 (one) subscription right will be granted, giving the right to subscribe for 1 (one) new share in SMH at a subscription price of NOK 11.82 per share. Oversubscription or subscription without subscription rights will not be permitted.
The subscription rights will be issued in VPS and delivered to eligible investors’ VPS accounts in due time before the commencement of the subscription period. The subscription rights will be included on Oslo Børs’ Norwegian Over The Counter (NOTC) list and will be tradeable immediately and independent of the approval of the offering prospectus.
MAXIMUS RESIDUAL CLAIM
As part of the Refinancing, the maturity date for the NOK 1.8bn residual claim relating to the former leasing agreement for the CSV Normand Maximus has been postponed to correspond with the maturity date for the new senior facility agreement. The postponement gives SOFF time to address refinancing solutions for the claim.
In addition, Solstad has been granted an option to purchase the residual claim for a consideration of NOK 200 million contingent upon litigation(s) being decided in favour of the previous lenders. SOFF is not in a position to assess the likely outcome of such disputes, and no assurances or views can be provided by SOFF in this regard.
FINANCIALS
Total transaction value is estimated at NOK 5.5 billion. The transaction is expected to result in a negative accounting effect for SOFF as at the date of closing, primarily due to USD/NOK currency fluctuations between signing and closing. The impact will be reassessed and reflected in the 4Q23 accounts.
For more detailed information about the Refinancing, see the stock exchange announcement dated 23 October 2023.
Pareto Securities has acted as financial adviser, and Wikborg Rein has acted as legal adviser to SOFF in the Refinancing process.
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Contacts
Lars Peder Solstad CEO, at +47 91 31 85 85
Kjetil Ramstad CFO, at +47 90 75 94 89
Solstad Offshore ASA