Prosafe SE

Second quarter and first half report 2016 - Seite 2

Operating expenses increased slightly to USD 53.8 million (USD 51 million). Cost saving initiatives implemented in 2015/2016 have reduced operating expenses in the second quarter. These savings were offset to a large degree by non-recurring costs relating to the vessels which previously operated in the Gulf of Mexico.
EBITDA increased to USD 61.6 million (USD 41.5 million). This improvement is mainly due to higher average day rates, as described above.
Depreciation increased to USD 29.1 million (USD 18.7 million) mainly due to the new build Safe Boreas and the Safe Scandinavia TSV project. Operating profit was USD 32.5 million (USD 22.8 million).
Net financial expenses for the second quarter were USD 26.4 million (USD 7.0 million) mainly due to currency effects and higher interest costs.
Net profit amounted to USD 5.2 million (USD 12.2 million).
Total assets at 30 June amounted to USD 2,599.7 million (USD 2,241.7 million), while the book equity ratio declined to 26.1 per cent (33.9 per cent). Net interest-bearing debt stood at USD 1,648.5 million (USD 1,123.7 million).
Financial restructuring
On 7 July 2016, the Company announced a proposed comprehensive refinancing. The refinancing included a proposed private placement of minimum USD 130 million and maximum USD 150 million at an issue price of NOK 0.25 per share, and a subsequent equity offering of up to USD 15 million. It was furthermore proposed that NOK 2.4 billion (approx. USD 290 million) in aggregate face value of the Company's outstanding senior unsecured bonds be converted into new shares at 30% of the face value and/or cash at the option of each bondholder.
The combined effect of the reduction in bank debt amortisation from Q1 2017 until and including Q4 2020, and the interest rate swap restructuring is expected to provide a total positive liquidity impact of approximately USD 493 million. There is also a significant financial covenant relief on all facilities to provide the Company with sufficient headroom to operate.
As part of and subject to the refinancing being completed, the Company has agreed with Cosco a deferred delivery of Safe Eurus to Q4 2019 (or such earlier time required by the Company) and a limitation on any further liability in the event Prosafe does not take delivery of the vessel, giving the Company increased flexibility and reduced financing risk. In addition, Prosafe and Cosco have also agreed a deferral of the repayment of the USD 29 million seller's credit to Q4 2019.