Havila Shipping Disputes Allegations of Default by Banks in Refinancing

 

Offshore services provider Havila Shipping is disputing claims by three of its bank lenders that the company is in default of its refinancing agreements. The company had worked for months before reaching terms in October 2024 to refinance nearly $91 million of debt due at the end of 2024 related to four now sold vessels and two that it continues to operate.

Havila is one of Norway’s large supply service companies to the international offshore energy industry. The company shows a total of 11 vessels, including PSV, subsea, and RRV, on its website and reports it also manages additional ships. It provides subsea construction, platform supply, and multi-field rescue recovery services.

The company asserts under the terms of an agreement announced on October 1, terms were set to refinance the fleet with three bank lenders and bondholders in two bond loans. It said the terms called for settling in cash $44 million and the remaining $46.5 million would be converted to shares. A new 2-year senior secured bond was issued in December valued at approximately $46.5 million to settle the cash debt. The company also reported at the end of December that the conversion for the other portion of the debt had been completed with a registration statement filed for the new shares.

As part of the agreement, Havila Shipping contends the three banks chose to extend the restructuring agreement by one year related to two of its vessels, PSV Havila Foresight and subsea vessel Havila Harmony, as well as four vessels, Havila Borg, Havila Clipper, Havila Fanø and Havila Subsea, which were sold.

Havila Shipping reported in a filing on January 21 that it had received a letter on behalf of the three banks that extended the restructuring agreement, claiming that the refinancing and issue of bond loan, which was used to redeem the debt of lenders who chose settlement at the end of 2024 in accordance with the agreement, is in breach of the restructuring agreement. It is also alleged that certain other circumstances constitute a breach of the restructuring agreement.

The operations of the Havila Foresight and Havila Harmony it says will service the outstanding debt during 2025. The remainder of the interest-bearing debt was to be refinanced and settled in cash at the end of 2025.

“The company disputes in full the lenders' understanding of the restructuring agreement,” the company writes in its response. “The company will, if necessary, have the matter resolved legally.”

The three banks are asserting that they will be entitled to declare a default on the outstanding debt, as well as to claim default interest and enforce security. 

Havila highlights that there are no cross-collateral agreements or cross-default linked to its new bond loan issued in December. 

It is the latest in a series of financial challenges for the offshore service provider. The offshore industry was challenged by a prolonged downturn which led to financial issues and consolidation.