French offshore vessel operator Bourbon Corporation announced that it has requested for reorganization proceedings to the Commercial Court of Marseilles. The reorganization proceedings will only concern the holding company Bourbon Corporation and not the operating companies, which will be able to continue their normal operations.
This comes after the Chinese bank ICBC Leasing expressed its intention to demand from Bourbon Corporation the payment of all outstanding rental payments up to 2026, as part of the guarantee provided to contracting companies, today in arrears.
Considering that despite these calls in guarantee, it was not in state of cessation of payments, Bourbon Corporation filed a request for “sauvegarde” procedure.
By decision of 24 July 2019, the Commercial Court of Marseilles rejected this request, considering that the guarantees activated by the Chinese company ICBC Leasing are proof that Bourbon Corporation is insolvent as of 24 July.
Bourbon Corporation has taken note of this judicial decision and draws the necessary conclusions thereby requesting for reorganization proceedings.
Bourbon has earlier proposed two options for the payment of its financial commitments to its creditors, based on the principle of value creation sharing:
-Share market risk and thus receive a reduced fixed part along with a variable part dependent on the net cash generated per vessel provided as guarantee for loans or leased property, in order to benefit from the pace and intensity of the recovery in the offshore services market over time;
-Take on the company’s risk and in this case agree with Bourbon on a reduced amount of debt to be repaid, with interest and repayable over 8 years, and receive Bourbon Corporation shares in compensation for the non-reimbursed part.
Bourbon thus offered ICBC Leasing a cash payment equal to the amount it requested as part of the Banks’ offer they were part of, which was announced on 5 June.
This comes amid a global downturn in the offshore sector which began in 2014-15.
Earlier in 2019, Bourbon joined forces with BV and Kongsberg on testing of a new solution for DP (Dynamic Positioning) system performance and redundancy audits, a first in the maritime industry.
