Sectors > Top Reports > Floatel Memo 270121

Floatel Memo 270121

Floatel – 40% IRR implied in Restructuring Proposal for 1L Bonds
PUBLISHED: 27 January 2021
SUBMARKET: Floatel, Top Reports, Top Reports,


Why Read?

  • Understand why we see recovery (present valued) on Floatel’s 1L bonds at 55%
  • Understand demand-supply outlook in the Accommodation Support Vessel (ASV) market and prospects for Floatel to achieve utilisation and day rates consistent with its business plan projections
  • Understand key elements of the proposed financial restructuring and their impact on expected cash flows and returns to 1L bondholders

What’s New?

  • Restructuring analysis – analysis of restructuring proposal and accompanying business plan projections 
  • New contract awards provide upside to the management business plan underpinning the restructuring proposal

Questions Answered

  • What minimum assumptions for day rates and utilisation rates are required in order for an investor not to lose money investing in Floatel’s 1L bonds at the current market price? How do these compare with historic day rates and utilisation rates and future prospects for these given projected demand-supply balance in ASVs?
  • What are the reasons for the historic decline in day rates and utilisation rates of Floatel’s fleet vs. management expectations when the fleet was ordered?
  • How lumpy is Floatel’s capex profile, particularly in relation to Special Periodic Surveys of the fleet?
  • How likely is it that capex in the management business plan is overstated?

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