Boa Offshore, the Norwegian offshore vessel owner, has embarked on a financial restructuring of the group’s business and balance sheet, which will be presented to the financial creditors of the company.

The company said that the financial situation has become worse than expected a few months ago, due to the weakened OCV market, the sales process of the company’s two AHTSs not progressing as planned, and weaker performance of the tug fleet.

Boa said that “the group’s liquidity position is now severe, and certain liquidity covenants are expected to be breached by the end of Q4 2016 or during Q1 2017.”

During the financial restructuring discussion with creditors, Boa will continue to operate normally. However, during the restructuring process no interest and amortization will be paid to bondholders and intercompany creditors, the company said.

Helge Kvalvik, CEO of Boa Offshore, said: “Boa Offshore is now deeply affected by the market situation. The outlook continued to weaken throughout this fall, and our financial situation is such that we have to go to our financial creditors. We will strive to carry out such discussions in an open and constructive way.”

Boa Offshore is owned by Taubatkompaniet AS, which is controlled by Ole T. Bjornevik.

Regarding the financial restructuring, Bjornevik said: “The offshore market has developed weaker than expected and we need to prepare for the time it will take before it improves. As a consequence, the group has to make major changes and adapt to the demanding market conditions, and this unfortunately also means that we now need to discuss with our financial creditors.”

The company has retained Pareto Securities and SpareBank 1 Markets as financial advisors and Ro Sommernes as legal advisor to assist in the process.