Petrobras cash allays Sevan debt doubts

by on September 28, 2012 12:39 pm BST

The Brazilian state oil company has now coughed up the cash to cover reimbursement of a higher-than-expected mobilisation fee, as well as import tax, for the Norwegian rig contractor’s newbuild cylindrical unit Sevan  Brasil, according to a bourse statement from the Oslo-listed rig contractor on Friday.

The drilling rig, delivered  earlier this year from China’s Cosco Shipyard, has started work in Brazil’s Santos basin under a long-term charter with Petrobras.

The abeyance of the payment meant that Sevan had been in temporary breach of loan agreements and was forced to reclassify $778.5 million in interest-bearing debt as a current liability.

However, the company said it is now “no longer in breach of covenants under the bank loan agreements, and the interest-bearing bank debt will be reclassified from short-term debt to long term debt as of the third quarter”.

In a further financial fillip, Sevan has also received waivers from its banks reducing the amount of required free cash from $50 million to $15 million until the end of this year.