Welcome to the 2021 practice bulletin from Conyers Norway. Our annual publication highlights the importance of the Norwegian market to our business practice in Bermuda.
The 12 months since our last issue have been very different, to say the least, and a bit of a roller coaster with second and third waves of Covid-19.
In general, 2020 has been a particularly difficult year for raising capital in the shipping industry. Across all segments, total capital raised fell 52% from 2019, according to Norwegian investment bank Fearnley Securities.
Nonetheless, Oslo-listed Bermuda companies in the shipping and offshore energy sectors have completed some offerings, including:
Stolt-Nielsen’s US $ 180.5 million bond offering in June 2020
Private placement of new shares of $ 65 million in Advance Gas in April 2021
Frontline’s $ 100 million common stock tender offer in June 2020
Large oversubscribed private placement of new shares by Golden Ocean, which raised US $ 337 million in February 2021
The US $ 46 million share offering of Borr Drilling in January 2021 and the US $ 32.8 million share offer in two tranches in September 2020.
A few companies have announced share buybacks, including Flex LNG Ltd and GoodBulk.
M&A activity included the acquisition by New Fortress Energy Inc. of Hygo Energy Transition Ltd. and Golar LNG Partners LP for US $ 2.8 billion in January 2021, and the equity investment of Höegh LNG Holdings Ltd. . in May 2021.
Two Bermuda companies were delisted last year: Team Tankers from Oslo Børs and Independent Tankers Corp. of N-OTC.
It is no surprise that we have seen a significant amount of restructuring activity, especially in the offshore energy sector. On page 3, we discuss the different options for restructuring a Bermuda business.
As Bermuda’s tourism industry has been hit hard by the pandemic, some cash has recently emerged with the news that Viking Ocean Cruises will be its home port in Bermuda for the first time this summer. You can read more on page 2.
Although once again the pandemic prevented us from making our usual visit to Norway, we will be there virtually at the Capital Link Maritime Forum on May 26-27 and hope to get in touch with you. We remain committed to our relationships with Norwegian law firms, defense clubs, shipowners and financial institutions and look forward to seeing you again.
Our recent transactions
Advising Avance Gas in the context of a private placement of $ 65 million of new shares (Guy Cooper)
Advised New Fortress Energy Inc. on its acquisition of Hygo Energy Transition Ltd and Golar LNG Partners LP. The combined transactions are valued at an enterprise value of US $ 5.1 billion and an equity value of US $ 2.43 billion. (Jason Piney, Robert Alexander, Amber Wilson)
Adviser to Larus Holding Limited, a 50/50 joint venture between Leif Höegh & Co. Ltd. and funds managed by Morgan Stanley Infrastructure Partners in connection with the takeover of Höegh LNG Holdings Ltd. (Guy Cooper, Edward Rance)
Advising Seadrill Limited and its Bermuda subsidiaries on their joint Chapter 11 restructuring (Jennifer Panchaud, Niel Jones, Karoline Tauschke)
Advising Seadrill Partners LLC and its Bermuda subsidiaries on their joint Chapter 11 restructuring (Jennifer Panchaud, Edward Rance, Angela Atherden, Aleisha Hollis)
Advised Viking Cruises Ltd. in connection with its US $ 350 million senior unsecured note offering, and Viking Ocean Cruises Ship VII Ltd in its US $ 350 senior secured note offering (Jason Piney, Andrew Barnes, Hailey Edwards, Aleisha Hollis)
Advised Standard Chartered on a US $ 374 million installation for Hafnia (Guy Cooper)
Acted for CMB Financial Leasing Co., Ltd. in connection with the sale and leaseback of three vessels for Stolt Tankers Limited (Guy Cooper)
Representation of a Norwegian bank in connection with the restructuring of a drilling company incorporated in Bermuda (Guy Cooper)
Represented various banks in connection with three separate installations for Frontline Ltd. (Guy Cooper)
Acted for Avenir LNG Limited in connection with an installation with Danske Bank (Guy Cooper, Andrew Barnes)
Acted for Team Tankers in the sale of Team Tankers Regional Ltd. at De Poli Tankers Group (Guy Cooper, Aleisha Hollis)
Advised Viking Cruises on an additional US $ 500 million investment by its existing minority shareholders, TPG Capital and the Canada Pension Plan Investment Board (CPP Investments), in parent company Viking Holdings Ltd. (Jason Piney, Jennifer Panchaud, Andrew Barnes)
Advising Stolt-Nielsen on the NOK 1.5 billion (USD 180.5 million) senior unsecured bond issue (Guy Cooper, Andrew Barnes)
Adviser to Viking Cruises Ltd. in its private offering of US $ 675 million senior secured notes (Jason Piney, Andrew Barnes)
Viking cruise ship home port in Bermuda for the first time
Bermuda will be the home port of a major cruise line for the first time in the summer of 2021, as cruise lines seek new options to return to safe navigation.
Viking Ocean Cruises plans to wear the Viking Orion in Bermuda for June and July. It offers six eight-day cruises that will take passengers to the Atlantic Ocean and to the island’s three ports of Hamilton, St. George’s and Dockyard.
In a press release, Torstein Hagen, President of Viking, commended the Bermuda government for its “collaboration and support in restarting the safe cruise industry.”
the Viking Orion halve its regular passenger capacity. Only those who are vaccinated against Covid-19 and children with clear test results will be allowed to participate in the cruises. The crew will also have been vaccinated.
Cruise lines with interests in Bermuda include Carnival, Norwegian Cruise Lines, Princess Cruise Lines, Seabourn Cruise Lines, and Viking Cruises.
Restructuring of a Bermuda company
Conyers has seen a significant number of restructuring activities over the past year, particularly in the offshore energy sector. The company advised Valaris in connection with its US $ 7.1 billion restructuring and its exit from Chapter 11 bankruptcy and advises Seadrill Limited and Seadrill Partners LLC, listed in Oslo, on their respective restructuring plans in Chapter 11. 11. There is no one-size-fits-all approach to restructuring and every business situation will require a different approach.
Temporary liquidation “ Light Touch ”
Interim liquidation is a Bermuda court-supervised insolvency process that is often used in restructuring as a way to protect the business from creditors’ claims while the business develops and implements a reorganization plan. This process is used as part of the restructuring of Seadrill Limited Chapter 11.
Provisional liquidation can be used by any company incorporated in Bermuda, including those listed overseas and operating overseas. Several court precedents have confirmed that Bermuda’s interim liquidation proceedings are recognized in other jurisdictions.
Bermuda law allows for a “light” interim liquidation, in which interim liquidators are appointed with limited powers. This means that day-to-day control of the company remains in the hands of the existing directors, but the provisional liquidators work alongside them to effect the restructuring. If successful, the provisional liquidators are then released and the company will continue to operate.
Bermuda arrangement scheme
For a company incorporated in Bermuda, a court-supervised arrangement system is often the simplest and most cost-effective option, even if the company is listed on a foreign stock exchange and its operations are based abroad.
A Bermuda System of Arrangement is a court-approved arrangement between a company and one or more classes of its creditors and / or shareholders, most commonly used to effect insolvent restructurings by means of a debt-for-equity swap. or some other debt reduction strategy. . Such a program is generally less expensive than reorganization proceedings such as Chapter 11 bankruptcy and can usually be completed in about 6 to 8 weeks.
The Bermuda Supreme Court has very broad jurisdiction over arrangement schemes, which allows it to facilitate the restructuring of companies with complex cross-border transactions. The statutory regime allows Bermuda companies listed on the NYSE, Nasdaq or Oslo Børs, for example, to restructure their financial liabilities without duplicating proceedings in other jurisdictions where their operations or creditors are based.
For a system to be approved, it requires the support of a number majority representing 75% by value of those who vote in each class. If this majority has been achieved and the Bermuda court has sanctioned the program, it will be binding on all relevant stakeholders within the same class and there is relatively little that can be done by dissenting stakeholders to prevent a system from taking effect.[View source.]