Seismic surveyor Polarcus defaults on debt, shares plunge

Voim ASA

26/01/2021 11:50

OSLO, Jan 26 (Reuters) - Oslo-listed seismic surveyor
Polarcus  PLCS.OL  has defaulted on its bank loans and bonds, it
said on Tuesday, sending the company's shares plunging more than
30%.
    Polarcus and other seismic surveyors have been hit by weak
demand as oil companies slash spending on geological data amid
the coronavirus pandemic and last year's crash in the price of
crude.
    "The company intends to pursue all available options with a
view to ensuring the financial sustainability of the company and
in the meantime will halt all payments of interest and
amortization to finance providers," it said in a statement.
    The company said banks had declined to extend the deadline
for repaying a $25 million working capital facility, triggering
a cross-default on other loans and bonds, which totalled $415.7
million at the end of September.
    United Arab Emirates-headquartered Polarcus said it had
hired financial and legal advisers for a balance sheet
restructuring, while intending to continue its operations as
normal.
    Following a drop in the company's share price, the Oslo
Bourse halted trade in the stock to give Polarcus time to
provide additional information.
    The company, which owns seven seismic vessels, including two
chartered to Russia's Sovcomflot, added it had an order backlog
of about $130 million as of Tuesday.
    A previous oil market downturn from 2014 to 2016 resulted in
a consolidation of firms in the seismic industry, with major
players either listed or headquartered in Norway.
    Shearwater GeoServices, headquartered in the city of Bergen,
has the largest seismic fleet following the acquisition of CGG's
assets in 2020 and Schlumberger's  SLB.N  marine acquisition
business in 2018, while Oslo-based Petroleum Geo-Services (PGS)
 PGS.OL  has five active vessels.
    Offshore seismic spending fell 40% last year, and even
though oil prices rebounded, oil companies are expected to
remain cautious, with spending seen rising only 3% this year,
Sparebank 1 Markets said in a note on Tuesday.

 (Reporting by Nerijus Adomaitis. Editing by Terje Solsvik and
Mark Potter)
 ((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))