Sveaas to help fix Viking Supply covenant breach

Norwegian investor backing another share issue as weak offshore market hits subsidiary of restructured owner.

Oslo-listed Viking Supply Ships is planning a share issue backed by Christen Sveaas' Kistefos to fix a covenant breach at a subsidiary.

The offshore shipowner said Viking Supply Ships A/S, due to the current weak market conditions, had failed to maintain its 12-month rolling EBITDA ratio and its $7m-plus minimum liquidity agreement.

Talks are taking place with banks over a solution.

A key element of any refinancing will be a capital injection in order to be compliant with loan agreements and to have enough working capital.

An extraordinary general meeting will be held in November to approve a rights issue of new shares to raise SEK 120m ($15m) in gross proceeds.

The sale will be carried out in the fourth quarter and will backed by Kistefos, its biggest shareholder with 75.3%.

Viking carried out a $22m share issue last December as part of its financial restructuring in the downturn.

Its refinancing was finally completed this summer.