Stolt Offshore enters into restructuring discussions with lenders

By Carlise Newman

Chicago, Sept. 17 - Stolt Offshore SA said it has entered into restructuring discussions with its lenders. The company also said it has completed preparation of its plan for financial recovery, known as the blueprint.

Stolt has retained Miller Buckfire Lewis Ying & Co. LLC as financial advisor to assist in its negotiations.

Stolt Offshore has obtained waivers through Oct. 15 on its primary credit facilities that will provide time to engage in further discussions with its lending syndicate and for the lenders to review the blueprint.

Stolt also expects that it will not be in compliance with financial covenants under its primary credit facilities on Nov. 30, unless negotiations with the lenders result in restructured credit facilities or further waivers are granted prior to the date. Stolt's largest shareholder, Stolt-Nielsen SA, has indicated to Stolt and its lenders that because of its own financial situation and the conflicting interest of the lenders to Stolt-Nielsen SA and the lenders to Stolt Offshore, it can no longer be relied upon to extend additional support as it has provided in the past.

Stolt's liquidity consists of a $330 million in a five-year revolver, which was reduced from $385 million on Aug. 31; and a $100 million four-year revolver, which will be reduced by $10 million on Jan. 1, 2004, and will be reduced by $10 million at six monthly intervals until the termination date.

While the process of restructuring provides a period of uncertainty, the company said it believes it has cash and liquid resources sufficient to fund ongoing operations through the anticipated completion of the bank negotiations.

Stolt Offshore, a Sunbury-on-Thames, U.K. offshore services company, will further analyze the impact of the blueprint on earnings over the coming weeks, and in order to provide for verification of this information, the company is announcing delay in the issuance of third-quarter earnings until Oct. 15 and fourth-quarter earnings until Feb. 18, 2004.

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