Siem takes control at FarstadNews // November 24, 2016
Farstad Shipping and Siem Oilservice Invest Holdings Limited have signed a binding term sheet for a restructuring of Farstad. The deal will see the Kristian Siem-led company assume control of the well known, until now family-owned offshore support vessel owner. Mr Siem has long been a leading figure in the offshore vessel sector for many years through his involvement with Subsea 7 and Siem Offshore.
The term sheet is subject to reaching final agreements with other key Farstad stakeholders, including senior secured lenders, bondholders and certain other creditors. Farstad is continuing its negotiations with these stakeholders.
Under the terms of the agreement, Farstad will issue a minimum of 702,000,000 ordinary shares for a total subscription of minimum NKr 1 billion at a price per share of approximately NKr 1.4245. Siem will underwrite NKr 1 billion of the cash issue, and subscribe for and be allocated a minimum number of new shares so that Siem owns 50.1 per cent of the shares in Farstad, post restructuring.
Tyrholm & Farstad AS, the largest shareholder of Farstad, is cooperating with Siem for the purposes of the restructuring, and will be offered preferential rights to subscribe 105,300,000 new shares for a subscription of NKr 150 million. The rest of the new shares will be offered to a mix of existing shareholders and other stakeholders to be finally agreed. Siem will carry out a mandatory offer for the existing shares of Farstad in accordance with chapter 6 of the Norwegian Securities Trading Act.
In a statement, Farstad said a “substantial majority” of senior secured lenders support the term sheet. Senior secured lenders will be requested to convert parts of the group’s secured debt into equity in Farstad, and provide amortisation deferrals so as to provide the company with a financial runway throughout 2021. Bondholders in Farstad’s bond loans will be requested to convert all outstanding amounts, in total NKr 1.4 billion, under the bond loans into equity in Farstad. Certain other creditors will also be requested to contribute in the restructuring.
The company’s head office and operations centre will remain in Ålesund.