Solstad offshore, the Norwegian marine owner, decided to terminate the bareboat fleet charter contract with SFL Corporation for three AHTS. Since 2016, the three AHTS have been idle.
SFL Corporation is the owner company of John Fredriksen, king of Norwegian ships. The company said SFL recorded a non cash impairment of $34.1 million in the fourth quarter due to the termination of contracts and the continuing uncertainty of these ship assets.
The three AHTS are "sea cheetah", "sea Jaguar" (both built in 2015) and "sea leopard" (built in 1998). Currently, Solstad and SFL have agreed to terminate the bareboat charter, and it is expected that the three ships will be returned to SFL in the first quarter of this year.
SFL pointed out that the offshore support vessel (OSV) market is full of challenges, and three AHTS of Solstad have been idle for a long time since 2016. Due to market difficulties, Solstad has announced that it will restructure its balance sheet and has entered into a standstill agreement with stakeholders and lenders, including SFL, until March 31, 2020,At present, SFL has sold two of the returned AHTS to unrelated third parties, and the remaining one will be recycled in Norway's green Shipbreaking facilities in accordance with the European ship recycling regulations.
In addition to the three AHTS, Solstad has a bareboat charter contract with SFL for two platform supply vessels (PSVs), whose agreements remain unchanged. SFL's offshore assets include Solstad's five osvs and three drilling platforms. These offshore assets generated $26.5 million in rental income in the fourth quarter of last year.