Lenders take control of Polarcus assets after seismic surveyor defaults on debt

OSLO, Jan.26 (Reuters) – Lenders took control of Polarcus ships on Tuesday after the seismic expert defaulted on its bank loans and bonds, hit by lower spending by energy companies battling the pandemic of COVID-19 and the volatility of oil prices.

Shares of the Oslo-listed company plunged 47% after resuming trading following an earlier suspension.

Polarcus said the lenders had taken over shares in subsidiaries that owned seismic vessels and replaced directors in each subsidiary, but wanted to continue operations.

“Along with their actions described above, the lenders made it clear to the company that their intention was not to endanger or destabilize the Polarcus organization,” he added.

The Dubai-based company’s fleet consists of seven seismic vessels, two of which are chartered to the Russian Sovcomflot and one on standby.

“The lenders have confirmed that they are prepared to enter a standstill period which will allow operations and awarded projects to continue without interruption and discussions are underway in this regard,” Polarcus said.

The company said earlier that banks refused to extend the repayment term on a $ 25 million working capital facility, triggering a cross-default on other loans and bonds, which totaled $ 415.7 million. dollars at the end of September.

Seismic surveyors, such as Polarcus and PGS, have been hit by weak demand as oil companies cut spending on geological data amid the pandemic and collapse in crude prices last year.

Offshore seismic spending fell 40% last year, and even though oil prices have rebounded, oil companies should remain cautious, with spending increasing only 3% this year, Sparebank 1 Markets said on Tuesday in a note.

A previous slowdown in the oil market from 2014 to 2016 led to a consolidation of companies in the seismic industry, leaving a few players with ships. (Report by Nerijus Adomaitis. Editing by Terje Solsvik and Mark Potter)

(c) Copyright Thomson Reuters 2021.

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