A group of creditors proposed a refinancing plan for the debt-laden shipping company Dof, but the bailout was rejected by shareholders at Friday’s extraordinary general meeting.
This means that the company is moving towards the reconstruction process, ie a forced legal solution.
Dof, which has a fleet consisting of offshore supply vessels and provides services to oil producers, currently has more than 2 billion kroner in unpaid interest on the books.
Maria Granlund, bond owner and rate manager at Alfred Berg, calls the outcome a disgrace.
– Then this will go to court as planned. It will cost the company more money, and it will take additional time. In any case, the company has very large debts and the company must resolve this matter. Granlund told DN immediately after the results of the general meeting were announced that a debt conversion was required.
The company informed earlier in November that it would begin the reconstruction process if The rescue plan was voted on by shareholders.
In the letter sent by the company on Friday, Dof reiterated that the creditors and the company had agreed to carry out the reconstruction under the Norwegian Reconstruction Act.
DN was unsuccessful in obtaining a comment from MD Mons Aase at Dof.
In general, the voluntary proposal of creditors consists of:
- The current debt of just over NOK 25 billion should be reduced to NOK 19 billion.
- By converting the debt, the creditors had to write off six billion in debt in exchange for 96 percent of the company’s stock.
- Today’s shareholders were given four percent of the shares of “Nai Dove”.
Attention Director Maria Granlund has prepared to take Dove’s case to court: – It’s time to end this
The proposal for a financing solution was the result of negotiations between Dof, its banks and creditors in three bonds, and was voted on Monday by 97-99 percent of bondholders in the respective debt securities, which, among other things, Finansavisen have mentioned. But the proposal did not get the required majority of shareholders on Friday.
The bonds were issued by Dof Subsea’s subsidiary – and through the three securities, investors provided financing to Dof Subsea. The securities are tradable, and are ranked higher in negotiations than shares in the Dof because Dof Subsea is the largest shareholder in the Dof Group.
Dof has worked for more than three years to find a long-term refinancing solution with banks, shareholders and bondholders.
In a stock market announcement on Friday, the company wrote:
As stated in the announcement on November 3, 2022, Dof and the group’s creditors have agreed, should this result occur, to carry out the proposed restructuring of Dof as a mandatory process under the Norwegian Reconstruction Act or through the previously declared Dof bankruptcy.
Dof has faced difficulties in recent years, after the collapse of oil prices in 2014 sharply reduced the entire oil services industry, which was exacerbated by the Corona pandemic.
The bondholders group consists primarily of Nordic fund managers, including Alfred Berg, DNB, Holberg and Lundbeck-Fonden. Now they’re taking the Dof to court, and if the Dof is treated there under the new Reconstruction Act, the shipping company’s existing shareholders could end up with one percent of the stock.
The company stated that in the worst case there would be bankruptcy proceedings and that the creditors would buy the subsidiary they provided through the bonds. But then the shareholders will not get anything at all, since “no cash consideration will be given”.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links that lead directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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