Floatel International, an associated company of Keppel Offshore & Marine (Keppel O&M) says it has reached an agreement with its lenders on Jan 9.

Under the agreement (also known as the collateral discharge agreement), Floatel will deliver full discharge of security of the bank vessel assets.

According to Floatel, the agreement has the approval of a “significant majority” of the company’s shareholders and the 1L bondholders and 2L bondholders that are party to the lock-up agreement.

The completion of the agreement is subject to Floatel’s securing and satisfying all conditions under the new revolving credit facility (RCF).

The RCF will be drawn in part to fund a settlement payment of US$46 million ($60.9 million) to the lenders under the collateral discharge agreement.

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Upon completion of the agreement, which may occur in February 2021, the vessel “Floatel Endurance” will remain in Floatel.

Cash in the blocked accounts and other assets retained by the relevant group company and claims of the lenders against the group including the US$115 million owed in principal, interest and fees under the bank vessel facility and RCFs shall be fully and unconditionally released once the agreement is completed.

“As set out in our Dec 5, 2020 announcement, there are a number of other steps to be taken to complete Transaction, but certain of these steps are simplified as a result of the agreement with the lenders. In particular, the scheme that had been considered to manage the Common Collateral claims will no longer be required,” says Floatel.

“The collateral discharge agreement, and the transaction generally, will be for the benefit and security of all stakeholders including current and future customers, suppliers, offshore and onshore personnel as well as shareholders and secured financial creditors,” it adds.

“As before, those vessels that are on charter, including Floatel Endurance currently at the Martin Linge field can continue to operate as normal. Retaining the Floatel Endurance further enhance the ability to sign and deliver new assignments as well as secure the future of the business.”

Shares in Keppel Corporation closed 10 cents or 1.8% up at $5.63 on Jan 8.