Bourbon Offshore suspends listing after creditors demand debt
French shipping company Bourbon Offshore is in serious danger of bankruptcy now that a group of creditors has demanded immediate payment of outstanding debt with a total value of USD 800 million.
In a short press release, Bourbon Offshore said it has requested the suspension of its listing at the Euronext stock exchange in Paris. “Bourbon Corporation is examining available options and intends to pursue discussions with its creditors with the objective to take all appropriate measures to protect its interests and those of its personnel,” it added.
If the creditors are not willing to negotiate new terms or arrangements, Bourbon Offshore has no other choice than to file for bankruptcy. The company, with a fleet of 500 vessels one of the largest offshore service providers in the world, has been in financial distress since the oil price dropped in 2014 and it is highly unlikely that the company will be able to secure USD 800 million.
Additionally, the company is already in talks with another group of creditors who are willing to relieve Bourbon Offshore of EUR 1.4 billion in debt and provide EUR 120 million in fresh capital in exchange for 93% of the company’s shares.
The creditor’s claim comes at a time when confidence in the oil price is returning. According to analyst firm Rystad Energy, 2019 is set to trump the new project investment levels of 2014 as oil majors have ramped up their exploration activities. So far, projects totalling a worth of USD 50 billion have been sanctioned this year. This number could grow to USD 123 billion if all projects awaiting final investment decision in 2019 are given the green light. In comparison: back in 2014, 74 offshore projects were sanctioned for nearly USD 78 billion.
According to Rystad Energy, “this is yet another signal that the offshore industry has turned a corner.” If Bourbon Offshore will be able to enjoy this long-awaited market recovery remains a question, for now.