Posted on January 13, 2022
Netherlands-based Vroon Group reports that it has reached a preliminary agreement on debt restructuring that will see its lenders become its majority shareholders.
“For several years Vroon has been in discussions with its lenders to resolve its over-indebtedness,” says the company in a statement released January 7. “We are pleased that we were finally able to reach a headline agreement with our lenders in November 2021 that will result in a significant debt reduction. This, together with book profits realized from vessel disposals during 2021, will lead to a very significant strengthening of the company’s balance sheet and allow for continuity of the company going forward. In return for the debt write-off, the company lenders will become the majority shareholders of Vroon. This agreement is still subject to formal approvals and is expected to be implemented in the first half of 2022.”
RED INK 2020
Vroon says it only recently completed the audit of its 2020 results and has now published its 2020 Annual Report. It notes that its Vroon Offshore Services (VOS) business segment was negatively impacted during 2020 by a severe downturn in oil & gas markets, largely the consequence of the global COVID-19 pandemic. Vroon’s other businesses were also negatively affected by the COVID-19 pandemic, but to a lesser extent.
Net revenues in 2020 amounted to $356 million. EBITDA from operating activities was $74 million and the company’s net result was a loss of $314 million, mainly the result of a $214 million non-cash asset impairment.
Continued losses and asset impairments over the previous five years resulted in a negative group equity as at year-end 2020.
Vroon says that its managing board implemented measures to reduce costs and preserve cash generation, which remained strongly positive during the year. In 2020, Vroon divested 18 vessels deemed to be either uneconomical or non-strategic.
IMPROVED RESULTS IN 2021
Vroon says that. during 2021, market conditions improved gradually for most of it’d businesses, although the impact of the continuing COVID-19 pandemic was reflected in crew costs and other voyage-related expenses. Its offshore division saw oil prices recover from the very low levels in 2020 and its deepsea division benefitted from increasing trade flows and regional tonnage shortages.
“As part of our ‘Vroon as a platform’ strategy, which was launched in 2020, and agreements with our lenders to dispose of non-strategic businesses in order to repay debt, we made the decision to divest our container, dry-bulk, crew-transfer vessels and car carriers,” says the company. “At the same time, we consolidated and expanded our market position in our other Offshore and Deepsea activities. During the year, we disposed of 18 vessels and largely completed our fleet-disposal process. Cash generation remained strong and we anticipate financial results will be an improvement on 2020, despite a smaller fleet.
“We are cautiously optimistic for 2022 and anticipate a continued improvement for our offshore division and most of our remaining deepsea businesses.”