IMR and light construction player Harkand has entered into administration after it, earlier this year, defaulted on the payment of its senior secured bond issue and interest, due to insufficient liquidity.
As a consequence of default, Nordic Trustee, which acts as bond trustee for the bond issue where Harkand Finance is the issuer, replaced the company’s board of directors in March, and at the end of April, agreed with Harkand to terminate the internal bareboat charters for two dive support vessels, Harkand Atlantis and Harkand Da Vinci, just over a month after they were scheduled for Flyndre job for Maersk Oil.
Following the charter termination notice, the Nordic Trustee proposed acceleration of the bonds on April 29. Namely, this gives the lender the right to demand the entire loan amount (principal plus interest) to be paid at once, in case the borrower fails to make payments (defaults) or gets into serious financial difficulties.
The proposal became reality on May 4, when Nordic Trustee notified Harkand that the bond issue has been declared for immediate payment due to continuing defaults. Oslo Børs and The Financial Supervisory Authority of Norway have therefore decided to suspend the bond.
In addition, on April 22, Bollinger Fourchon filed a lawsuit in federal court in New Orleans seeking consent to seize Harkand’s vessel ‘Siem Spearfish’ due to unpaid debt for multiple uses of its docks.
There is no official statement from the company, whose website has been down since yesterday, however the company’s answering machine message in Aberdeen office confirms that the Harkand Group and several of subsidiary companies are in administration.
In a recorded message the company said that on Wednesday, May 4, several individuals at Deloitte were appointed joint administrators of Harkand Group and its subsidiaries including: Harkand Global Holdings ltd; Harkand Gulf Ltd; Harkand Gulf Contracting Ltd; Harkand AME Ltd; ISS Acquisitions Ltd; ISS Group Holdigns 1 Ltd; ISS Holding Ltd; Integrated Subsea Ltd; ISS HR Services Ltd.
Reportedly, this will result in 171 jobs lost. 39 staff will be retained for a short period to assist with the wind-down of the European business, Deloitte said.
A number of other entities within the Group, including Aberdeen-based Andrews Survey, which employees 46 staff, are not subject to insolvency proceedings, and continue to trade. Negotiations are ongoing with a number of parties to secure a sale of the Andrews Survey business.
Subsea World News Staff