Solstad Offshore warned one of its investors is considering bringing a class action lawsuit over losses it allegedly incurred as a result of a recent refinancing deal.
The Norwegian vessel operator (OSE:SOFF) said on Friday that investment group Kistefos had written to its board to inform them it was considering initiating a lawsuit against board members and the CEO. The action concerns a bid to claim compensation for losses the group says it incurred as a result of a refinancing deal in October.
Solstad struck a deal with Aker that saw it secure 9.7 billion NOK (£720 million) in new credit, underwritten by DNB and Eksfin, with which it could fully refinance a fleet loan.
Around NOK 4bn (£300m) in new equity was raised with Aker contributing a minimum of NOK 2.25bn (£170m), along with a commitment of an additional NOK 0.75 billion (£55m) to “significantly improve the financial position” of the group.
In doing so, the company overhauled its structure and created ‘Solstad NewCo’, in which Solstad Offshore retained a 27% stake alongside other investors.
The transaction gave Aker and the Røkke group about 60% of the new Solstad unit, where the bulk of its vessels were to be moved.
Kistefos chairman and owner Christen Sveaas alleged the decision represented “gross discrimination” against existing shareholders. Speaking at the time he described the deal as “one of the wildest transactions we have seen on the Oslo Stock Exchange.”
He contended that the deal involved “gross discrimination of shareholders and enriches Aker at the expense of the shareholder community.”
“Kistefos believes the restructuring plan is a breach of integrity and morality and a clear breach of normal market practice,” Mr Sveaas added.
Kistefos requested an extraordinary general meeting of shareholders in December, though the request was later withdrawn, and the refinancing deal was later completed in January.
According to the March letter, Kistefos is considering bringing its lawsuit in the form of a class action, which would enable other shareholders to participate.
However, both Solstad’s board and CEO maintain that any such lawsuit “would be without merit”.
Kistefos has been approached for comment.