Norwegian shipping company Farstad Shipping announced Thursday a planned restructuring deal with Siem has been ended by its creditors, calling into question the future operations of the company.
The financial restructuring with Siem Oil Service Invest was outlined in late November and meant to strengthen the Farstad’s balance sheet and liquidity amid the prolonged downturn in the offshore supply vessel market.
Farstad said Thursday however that it was unable to find a solution which was acceptable to all creditors, and therefore the term sheet outlining the deal between the two companies has been terminated. Farstad said it would continue to pursue other alternatives for financial restructuring.
Although the term sheet had lapsed previously, the companies said last month that they were continuing joint efforts to reach a solid financial restructuring plan for the future operations of Farstad.
Farstad said Thursday that in order to preserve liquidity, the company and its subsidiaries will uphold their current suspension of service of financial debt, which has been in place since December 20. The companies’ stand-still agreement with its secured lenders, ending on January 31, 2017, will also remain in force.
“The Farstad Shipping group will otherwise maintain operations as a going concern. All suppliers and trade creditors will be paid in their ordinary course,” Farstad said in a statement.