Viking Supply Ships announces rights issue and offset share issues

By Caroline Salls

Pittsburgh, Nov. 28 – Viking Supply Ships AB announced a fully guaranteed SEK 207 million rights issue and a total of SEK 141 million in directed share and offset share issues designed to strengthen the group’s financial position in accordance with a financial restructuring agreement, according to a news release.

As a result of negotiations, Viking said the subscription price is SEK 1.50 per share in all the share issues. The company said that price closely correlates to the market price for its series B shares.

Under the rights issue, existing shareholders will have a preferential right to subscribe for new shares. For each existing series A share held on the record date, seven series A subscription rights will be received, and for each existing series B share, seven series B subscription rights will be received.

The subscription rights allow the holder to subscribe for new shares with primary preferential rights, whereby nine subscription rights give the right to subscribe for one new series A share and B share, respectively.

The record date for participation in the rights issue is Dec. 2. The subscription period will run from Dec. 5 through Dec. 19.

The rights issue is fully guaranteed through subscription and guarantee undertakings from Viking’s main shareholder Kistefos AS.

The agreement also includes an offset of a SEK 56 million part of an existing bond loan against new shares in Viking Supply Ships.

In addition, an agreement was reached with bondholders regarding cash settlement of NOK 35 million corresponding to the remaining part of the bond loan, resulting in a discount for Viking Supply Ships.

The restructuring agreement includes a directed share issue of SEK 42.5 million of series B shares in Viking Supply Ships to a subsidiary of Kistefos and an SEK 42.1 million offset of claims from Kistefos against new series B shares in Viking Supply Ships.

The company said the financial restructuring and the present rights issue and other new share issues aim to strengthen the group’s balance sheet and significantly reduce the need of assets for amortizations through Jan. 1, 2020.

In connection with the return of two of TransAtlantic AB’s previously bareboat chartered vessels, there is an existing residual value obligation of SEK 70 million toward the financing bank, payment of which has been postponed to Dec. 31.

TransAtlantic dismantling

During 2016, the company said it decided to dismantle the remaining business within TransAtlantic AB. Related disposals are expected to, collectively, give the company enough liquidity to be able to fulfill TransAtlantic AB’s remaining loan facilities. The liquidity needed to be able to fully fulfill TransAtlantic AB’s residual value obligations requires that the rights issue in Viking Supply Ships becomes fully subscribed.

If the conditions of the restructuring agreement, including the implementation of the rights issue, are fulfilled, the company said it expects the key parts of the financial restructuring will be completed during the fourth quarter. The financial restructuring is estimated to be completed in January.

When the restructuring has been completed, Viking Supply Ships expects to have enough liquidity to maintain business, even if the market remains weak, until 2019.

Share capital increase

According to the release, the company’s share capital will increase by not more than SEK 138.01 million to SEK 315.46 million by issuance of not more than 9.05 million new series A shares and of not more than 128.96 million new series B shares.

Viking said Nov. 30 will be the last day of trading in its series B shares, including the right to participate in the rights issue with preferential right. The publishing of the preliminary outcome of the rights issue is estimated to occur on Dec. 20.

Subscription in the directed share issues shall be made in connection with the end of the subscription period in the rights issue, except for the share issue to the bondholders against setoff payment, which will take place no later than Jan. 16.

Swedbank Corporate Finance is acting as financial adviser to Viking Supply Ships in conjunction with the transactions. Advokatfirmaet Wiersholm is acting as legal adviser in conjunction with the financial restructuring, and Mannheimer Swartling Advokatbyrå is acting as legal adviser in conjunction with the share issues.

Based in Gothenburg, Sweden, Viking is an offshore and icebreaking company in the Arctic and subarctic areas, as well as a provider of shipping services between the Baltic Sea and the continent.

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