The company on Monday said that as the first step of an economic restructuring of the Farstad group, Farstad and a majority of its secured lenders on June 30, 2016, entered into a standstill and deferral agreement.

This means that the relevant lenders have agreed to a postponement of all amortizations of the Farstad group falling due to them in the period from and including July 1, 2016, until October 1, 2016, and a defeasance of all financial covenants during the same period.

The Farstad group will otherwise continue its operations in their ordinary course, subject to certain restrictions to ensure the interest of its lenders, the company said.

“Farstad, together with its financial and legal advisors, will in the upcoming months work closely with investors, strategic partners and lenders with a view to find a solid financial platform for the long term operations of the group. In parallel Farstad continues the work to optimize its operating model, fleet composition and fleet utilization, as well as operating cost improvements.”

Referring to the Farstad announcement Ocean Yield, which currently has two vessels on long-term bareboat charter to Farstad has said that Farstad will continue to pay full bareboat hire to Ocean Yield during the standstill period.

Certain covenants in the bareboat agreements have, however, been waived until October 1, 2016, Ocean Yield said.

Farstad is one of Norway’s largest offshore ship suppliers, which operates 57 offshore support vessels of various types said. The company in May said that the market situation in the first quarter had been challenging, with no evident improvement in the fundamentals for the offshore oil services industry despite the oil price rising from almost a record low levels. The company then said it believed that there was still considerable uncertainty as to how long it will take before the offshore activity recovers.