The executive management team at Norwegian offshore carrier Farstad Shipping would likely prefer to forget the developments the carrier has gone through in 2015. It seems that one bad development after another have hit the company, and now the carrier can add one more to the pile. In a statement to the Oslo Stock Exchange, Farstad Shipping announces a total impairment of USD 150.7 million on the carrier's fleet and other fixed assets for 2015.

"Based on the development in brokers' market values of the fleet, the prevailing market prospects as well as the uncertainty related to the vessels future earnings, the Board of Farstad Shipping ASA has decided to undertake impairments totaling NOK 1,094 million (around USD 127 million) of vessels and other fixed assets in the fourth quarter," notes Farstad.

As such, a majority of the carrier's total impairment stems from the fourth quarter.

This statement comes in the wake of an announcement from similarly Norwegian offshore carrier Havila Shipping informing that a rescue plan for the carrier has collapsed.

"The Company remains in a challenging position, and will immediately work with its financial creditors in order to reach a standstill agreement. While these discussions are ongoing the Company has decided to halt payments of interest and amortization to all of its finance providers. The Company's bank lenders have indicated support for a standstill agreement and corresponding summons to bondholder meetings are expected to be announced shortly," wrote Havila Shipping in the statement on Tuesday.

Havila Shipping's rescue efforts collapsed

Farstad Shipping will publish its annual report 2015 on February 29th, and impairments are not the only item in store - the report will also herald layoffs, as the carrier in late January informed its employees that it had launched an initiative aimed at reducing administrative costs at the carrier's headquarters in Aalesund, Norway. CEO Karl-Johan Bakken said the following:

"The current market situation is challenging. In order to strengthen the company's competitiveness, we are working continuously to keep costs at the right level."

Farstad Shipping is hit hard by the crisis in the offshore sector, and the carrier - among the oldest players in the industry - has been forced to close its Aberdeen office, sell older vessels and currently has seven vessels idled in wait for the market to recover a semblance of balance between supply and demand.

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