Kristian Siem pulls out of rescue efforts for Farstad
For months, major Norwegian investor Kristian Siem has, via his company Siem Oil Service Invest (SOSI), tried to settle a financial solution with the management of crisis-stricken offshore carrier Farstad Shipping.
These efforts were fruitless, and Farstad Shipping informs Thursday in a statement to the Oslo Stock Exchange that the partnership between the two companies has been discontinued.
"Therefore, the term sheet between Farstad and SOSI has terminated, and Farstad will pursue other alternatives for its financial restructuring in continued cooperation with its key financial creditors," writes Farstad in the statement.
The announcement comes just one week after the carrier stated that a deal for a restructuring was almost finalized with Kristian Siem and SOSI.
The terminated collaboration between Farstad Shipping and Kristian Siem will not affect the deal which Farstad has in place with creditors for deferrals on debt payments until Jan. 31 this year.
Crisis quarter
The low oil price and consequential weak employment for offshore carriers is what sent Farstad Shipping and the company's 55 vessels spiraling into a financial crisis.
The latest financial report from Farstad Shipping, for Q3 2016, showed a negative operating result of NOK 270.3 million (USD 31.5 million), a setback from the positive NOK 73.6 million in the third quarter 2015.
In relation to the interim report, Farstad Shipping stated that the company does not believe in an improved offshore market anytime soon.
"The North Sea market for AHTS and PSV tonnage has further deteriorated during 3Q 2016, and is expected to reach a lowpoint over the winter period. This looks to be in parallel with the international market condition overall. The number of vessels in layup worldwide is rising, but has not managed to even maintain market balance," Farstad wrote about the future after the third quarter.
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