Oslo-listed seismic survey shipping company Polarcus (OSE: PLCS) has announced its intention cease operations and terminate all employees after its lenders withdrew support after taking over control of the company in response to the company defaulting on its bank loans and bonds.
The move comes as the company faces fallout from the COVID-19 pandemic and volatile oil prices.
Polarcus announced on 26 January 2021 that its vessel-owning subsidiaries had each received default and enforcement notices from its bank lenders and the lenders replaced the directors at each subsidiary with their own nominee. At the time, the lenders indicated that they wanted to continue operations.
In an update issued this week, however, Polarcus now informs that the lenders have withdrawn their support.
“The Company has received notice from the Lenders that they no longer support the continuance of the Company’s business relating to the Vessels and the New Managers have instructed Polarcus to sail the Vessels to safe locations in order to initiate a sales process,” Polarcus said in its update.
Polarcus said it would continue to cooperate with lenders to bring current operations to an end safely. It has also reached out to its customers to inform that their vessels are longer available and told them seek alternative solutions.
“In light of these circumstances and given their impact on the Group’s financial position, notice of termination of employment will shortly be issued to all Group employees,” Polarcus said.
Polarcus’ fleet consists seven seismic vessels including the Vyacheslav Tikhonov, which is on bareboat charter to Russian shipping giant SCF Group and not subject lender control.
“The Lenders have made clear that they remain open to discuss a standstill period in relation to their remaining claims and collateral with the view of finding a solution which would allow the continued operation of Vyacheslav Tikhonov, owed by Polarcus Selma Limited, a subsidiary of the Company. The Lenders do not hold any security in either this vessel or this subsidiary. Polarcus will continue to pursue such a standstill agreement in order to bring stability to the remainder of its business.”
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