Sevan Marine Slumps in Oslo on Proposal to Defer Debt Payments

Sevan Marine ASA (SEVAN), a Norwegian maker of floating oil-production and storage vessels, fell the most in six weeks in Oslo trading after proposing to defer debt

interest payments to stave off bankruptcy.
Sevan Marine slumped as much as 27 percent to 0.49 krone, the biggest intraday decline since May 26, and traded at 0.54 krone as of 9:30 a.m. local time. The stock has dropped 92 percent this year as maintenance costs overshot the budget.
The company plans to defer interest payments on secured debt until at least September and convert unsecured bonds to equity, Arendal-based Sevan Marine said today in a statement. “The company continues to be under serious short-term liquidity pressure,” it said.
Sevan Marine failed to complete a rights offer in May that would have helped fund maintenance costs at its cylindrical floating production and storage vessels, which the company expects to reach as much as $170 million, compared with the $135 million it previously forecast.
Sevan Marine will seek to raise at least $200 million in a share sale aimed at bondholders and a rights offer for existing shareholders, the company said today. “No assurance can be given that a viable global solution can be found in a timely manner, failing which the board will be required to file for bankruptcy,” it said.
Source: Bloomberg