Lenders take control of Polarcus assets after default

Lenders took control of the ships of Oslo-listed, Dubai-based  seismic surveyor Polarcus on Tuesday January 26th after the company announced that it had defaulted on its bank loans and bonds (IMN January 26th 2021).

The company’s shares were suspended following the announcement, and when trading recommenced they fell significantly, by more than 45% at one point.

Polarcus said that its lenders had taken over shares in subsidiaries that own the seismic vessels and that they had replaced directors in each subsidiary. However, it said that the lenders wanted to continue its operations.

“In parallel with their actions described above, the lenders have made it clear to the company that their intention is not to jeopardise or destabilize the Polarcus organization”, Polarcus said.

The Polarcus fleet consists of seven seismic vessels, including two chartered to Russia’s Sovcomflot, and one in lay-up. As is normal with such shipping companies, individual ships are not owned by the company, but by individual subsidiaries, usually wholly owned by the parent company, which is legally the operator.

Polarcus said that “the lenders have confirmed that they are open to entering into a standstill period which will allow continued operations and awarded projects to be undertaken without disruption and discussions are underway in this regard”.

The default was a knock-on effect of its lender banks declining to extend the deadline for repaying a $25m working capital facility. That triggered a cross-default on other loans and bonds.