Vroon Family Hands Control of Its Shipping Company to its Lenders
The Vroon family will lose its controlling interest in its shipowning company after 132 years of operation, the firm announced January 7.
An ill-timed investment in offshore vessels left the firm poorly prepared for the 2014 oil market collapse, and Vroon has struggled to repay a burdensome $1 billion in debt. After five years of effort to right the ship, the owners have decided to hand a majority stake to the firm's bankers in exchange for debt relief. Vroon reached an agreement to this effect in November 2021, but the firm waited to announce it until an investor update released Friday.
Between weak sales and asset impairments, Vroon has been losing hundreds of millions of dollars a year since 2016. It has been in talks with lenders on and off since the start of the oil downturn, and it agreed a first restructuring deal with its banks in 2018. Managing director Coco Vroon stepped down from his post shortly after, making way for CFO Herman Marks to step up and manage the firm's restructuring.
However, the firm lost another $314 million in 2020, driven primarily by asset impairments. The firm took measures to stem the losses, including the sale of 18 vessels in the container, bulk, crew-transfer and car carrier segments. Market conditions improved in 2021, and the company expects that the full-year results will be better than they were in 2020, despite a smaller fleet.
The debt writeoff deal reduces Vroon's debt load from about $1.1 billion to just $400 million, according to Dutch shipping outlet Nieuwsblad Transport. Combined with the vessel sales, this will strengthen the company’s balance sheet and "allow for continuity of the company going forward," Vroon said in a statement. In return for the write-off, a group of 18 banks will become the company's majority shareholders, subject to final approval.
"We are cautiously optimistic for 2022 and anticipate a continued improvement for our offshore division and most of our remaining deepsea businesses," the company said. "We are grateful for the support our lenders have provided in the past years and believe that, with the restructuring agreement implemented, Vroon has a clear path forward."