Bourbon Offshore Extends Deal to Defer Debt Repayment
Bourbon Offshore has renewed an agreement with the majority of its lenders to continue the suspension of payments on its loans and debt.
In a brief statement, the company said that the arrangement will allow it to focus on its operational priorities and to continue the search for a solution that will bring its finances in line with its performance. "The company remains confident in its ability to find such a solution in an amicable framework," Bourbon said.
The firm first announced an agreement to defer repayment and stop servicing its debt in July 2018. At the time, the firm did not disclose the total value covered by the agreement, but as of the end of 2017 Bourbon had total borrowings and financial liabilities of about $1.9 billion.
Bourbon has previously warned investors that OSV market conditions remain dire, years after the offshore drilling downturn began. Many of its competitors have gone through bankruptcy proceedings, acquisitions or both in order to shed their debt burdens and gain scale. In December, the head of the Norwegian Shipowners' Association predicted that 2019 will not bring a major turning point for OSV operators. "We're seeing increased activity," said association CEO Harald Solberg, speaking to ShippingWatch. "But for now it's not enough to increase prices. Demand remains too week."
Like many of its competitors, Bourbon's operational restructuring strategy centers on high-grading its fleet and reducing its manning costs, with a high-tech twist. Under a plan dubbed "BourbonInMotion," the firm intends to dispose of more than 40 older OSVs and invest in new high-tech systems for about 130 newer, "smarter" vessels. Through automation upgrades and condition-based maintenance programs, Bourbon hopes to eliminate four crew positions from every "smart" OSV, creating further opex savings.