Hornbeck Offshore makes another loss - needs to refinanceCompany News // February 17, 2017
Hornbeck Offshore recorded a net loss for the fourth quarter of 2016 of US$19.2 million compared to a net loss of US$2.7 million in the same period 12 months ago, and a net loss of US$16.5 million for the third quarter of 2016.
Revenues were US$41.9 million for the fourth quarter of 2016, a decline of US$46.8 million, or 52.8 per cent compared to the same period in 2015.
The company says it has sufficiently liquidity to fund operations through the end of 2018, but needs to refinance to meet upcoming debt obligations.
Announcing fourth quarter 2016 results, Hornbeck Offshore said that, as of 31 December 2017 it had a cash balance of US$217.0 million. In addition, the company has an undrawn revolving line of credit with a current borrowing base of US$200 million which, under certain circumstances, is likely to be capped at US$75 million during a portion of fiscal 2017. This credit facility is available for all uses of proceeds, including working capital, if necessary.
The company said that although it remains in compliance with all covenants under the facility, its ability to access the full amount of the borrowing base is subject to an anti-cash hoarding provision that, pro forma for deployment of the use of proceeds, limits its cash balance to US$50 million at any time the facility is drawn.
The company projects that, even with the current depressed operating levels, cash generated from operations together with cash on hand should be sufficient to fund its operations and commitments at least through the end of its current guidance period ending 31 December 2018. However, it does not currently expect to have sufficient liquidity to repay three tranches of unsecured debt that mature in fiscal years 2019, 2020 and 2021, respectively, unless it can refinance or restructuring the debt.
“Refinancing in the current climate is not likely to be achievable on terms that are in line with the company’s historic cost of debt capital,” said Hornbeck. “The company remains fully cognizant of the challenges currently facing the offshore oil and gas industry and continues to review its capital structure and assess its strategic options.”
As of 31 December 2016, the company had 44 offshore support vessels and two multipurpose supply vessels stacked. For the three months ended 31 December 2016, the company had an average of 46.5 vessels stacked compared to 26.8 vessels stacked in the prior-year quarter and 44.1 vessels stacked in the sequential quarter.