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By Nerijus Adomaitis
OSLO, Oct 22 (Reuters) - Oil service company Solstad Offshore is seeking negotiations with creditors and other stakeholders to boost liquidity ahead of the slow winter season, the company said on Monday, sending its shares down around 20 percent.
Solstad, with more than 4,000 employees, is one of the world’s largest suppliers of specialised vessels to the oil and gas industry as well as offshore wind power developers. It has a fleet of 141 vessels.
Solstad and other oil services companies are trying to bounce back after being hit by oil company spending cutbacks following a slide in oil prices. The company went through a major debt restructuring in 2016-17 and merged with several rivals.
Solstad’s second-quarter results in August showed that liquidity continued to shrink during the first six months of 2018. The company said it would look at various options, including vessel sales, entering into joint ventures or further consolidation.
“We were all too optimistic about when the recovery will happen,” Chief Executive Lars Peder Solstad told Reuters on Monday.
“2019 will probably be a bit better, but we will need to wait until 2020 or 2021 to see the rates rising to reasonable levels.”
Solstad’s CEO declined to elaborate on the options under consideration, or to comment further on the liquidity situation. The company reports its third-quarter results on Nov. 6.
In the second quarter, Solstad’s cash position fell to 1.37 billion Norwegian crowns ($166.13 million), down from 1.47 billion crowns at the end of March and from 2.4 billion crowns in mid-2017, according to the company’s second quarter earnings.
Soldstad’s total debt and liabilities stood at 31.1 billion crowns in the second-quarter.
Solstad said in its second-quarter report that it expected to benefit from increased offshore drilling and production activity to a certain extent in 2018, but even more in 2019 and onwards.
“I’m still very positive about the market’s recovery, but it’s more about the timing,” CEO Solstad said on Monday.
Solstad’s biggest shareholders are billionaire investors Kjell Inge Roekke and John Fredriksen, who own close to 40 percent of the shares.
Its competitors include U.S.-based Tidewater, which agreed in July to buy a smaller rival GulfMark Offshore Inc to expand in the UK North Sea, as well as Oslo-listed Siem Offshore and DOF. ($1 = 8.2465 Norwegian crowns) (Editing by Terje Solsvik and Jane Merriman)