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POSH Terasea Salvigilant_16x9

Joint venture POSH Terasea defaults on loan facility amid weak offshore market

An offshore joint venture involving PACC Offshore Services Holdings (POSH), Ezion Holdings and Seabridge Marine Services has defaulted on a loan facility due mainly to the protracted downturn in the offshore market.

The joint venture, POSH Terasea, is a 50:50 joint venture between TeraSea and PACC, and TeraSea is a 50:50 joint venture between Ezion and Seabridge Marine Services. POSH Terasea is being managed by PACC.

“POSH Terasea has been operating in market conditions that have seen prolonged weakness and remain very challenging due to, amongst other things, the uncertainty in the oil prices that has affected the national oil companies and multinational oil majors’ capital expenditure in exploration and drilling,” Ezion explained.

The outstanding amount of loan facility from the lender is approximately $27.6m as at 17 September 2019 and the lender has demanded a full payment including interest. The event of default may trigger cross defaults in other obligations of POSH Terasea with the total amount due coming up to approximately $34.21m.

The loan from the financial institution, comprising of ship financing loans and a revolving credit facility, is secured by five AHTS vessels owned by POSH Terasea and its subsidiaries.

POSH announced that it expects a “maximum financial impact of up to $42m” in impairment charges from the loan default.

Read more: Offshore project sanctioning could hit $123bn this year: Rystad Energy

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