According to Vessels Value, leading offshore owners are feeling the impacts of overzealous valuations of the past. Because of today’s offshore market conditions, asset values have suffered greatly, making vessel financiers worried about the prospects of recouping money lent to finance inactive offshore fleets.
The market valuations are more than likely breaking mortgage covenants, and the write downs that are necessary are more significant because of the original generous valuations of these assets.
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Vessels Value estimates the value of a five year old large PSV today at USD 13.7 million, which is less by about 22% year to date from USD 17.5 million, and around 20% below suggestions from other valuations providers. Namely, the value of a zero year old 5150 BHP AHTS has reduced by 50% since 2014.
The same happens in the subsea construction sector, mainly because of the negative impact of the Toisa court sales. Specifically, estimations for the market value of Dive Support Vessel Toisa Pegasus are at around USD 40.2 million, compared to November’s sale price of USD 38.95 million.
To determine the market value of an offshore asset, Vessels Value took into account various factors, such as earning sentiment, yard of build, prominent features of the vessel, confirmed sales in and assuming good seafaring condition of the ship.
It also provided different types of values and assumptions such as their discounted cash flow analysis. This analysis would lead to a more favourable outlook, based on the current depressed state and potential upside of the offshore market.
