DOF Group ASA (DOFG) Earnings Call Transcript & Summary

Good morning, and welcome to the quarter 3 presentation for DOF. We start on the next page with some operational highlights for the group, financial highlights. And as you can see, we had a revenue of NOK 2.82 billion in quarter 3, up close to a bit higher than NOK 800 million compared to same quarter last year. The EBITDA of NOK 1.030 billion compared to NOK 865 million last year. So a good operational third quarter this year. The EBIT at NOK 678 million compared to NOK 488 million. And then high losses on currency due to a weaker NOK towards, especially U.S. dollar, so ending up with a negative result of NOK 519 million in the quarter. The net interest bearing debt has increased due to the strengthening or the weakening of NOK or strengthening of U.S. dollars. So the net debt now is slightly above NOK 23 billion. And as you can see, that is up more than NOK 3 billion compared to the same quarter last year. And also resulting the equity ratio in a group has weakened further to minus 9%. Yes, on the restructuring agreement with secured lenders and a group of bondholders, the agreement includes conversion of equity -- of debt to equity of approx NOK 6.2 billion and the refinancing of DOF Subsea, DOF Rederi and Norskan facilities. We will talk more about that later on. The existing shareholders will own 4% after restructuring. The RA will need to be approved by the bondholders in DOF Subsea and the shareholders in DOF ASA. And we recently sent out settlement to the bondholders meeting and also invitation to the shareholders meeting in DOF. It has also been agreed alternative implementation steps if this agreement is not approved in the EGM and we will also talk more about that later in the presentation. Then we go to the next slide, please. On the restructuring, we have today a debt -- total interest bearing debt of approximately NOK 26 billion by the end of the quarter. And of that, the majority, more than NOK 20 billion, will fall due in the absence of the restructuring. And of course, also the debt has not received normal service interest or installments since June 2020. And I take -- its worth -- absolutely worth mentioning that any recovery in the market will not change the fact that the Group is not in a position to service this debt without a significant conversion of debt to equity. The Group does not have sufficient liquidity to service its current debt due in the absence of the restructuring. We will not be able to repay NOK 20 billion in debt. We will not be able to refinance NOK 20 billion in debt. So there is no sufficient liquidity. The lenders -- bank lenders and the bondholders are not willing to extend, and we are not able to -- obtain refinancing with other banks, bonds or any other sources. So the restructuring is absolutely the best solution for the group and for all stakeholders. Then if we move to the next slide, please. On operational highlights, we have had an average utilization fleet of 88%, which is up 5% compared to last year. It's been good performance in the subsea regions. We've had high activity in Brazil. The North Sea market, the spot market has been weaker in this quarter and quarter 2, and especially from August onwards it's been soft. We still have high tender activity, and as we can see on the backlog here, we have also been fairly successful on winning new jobs, new contracts and total value on the backlog now sits at by the end of the quarter at close to NOK 22 billion. And the backlog we have secured for quarter 4 also by the end of the quarter was NOK 2.6 billion. And of course, compared to the turnover in quarter 2 of 2.8% we can conclude that we have a fairly high backlog for quarter 4. Backlog secured for '23 is NOK 8.4 billion. And this is also done, I will assume above 70% of the expected turnover in '23. And then after balance date, we announced the contract with Esso in Guyana for 2 vessels, including the full Subsea scope with approx. NOK 2.7 billion. And that we also announced some contracts yesterday, meaning the resulting at the order intake after that in October has been close to NOK 3 billion. So almost over NOK 25 billion in backlog and also meaning that the backlog for quarter 4 and for next year has increased a bit after balance date. The fleet consists of 54 vessels, 46 owned, some on management, some on -- some are chartered. One vessel sold this quarter and no owned vessels in lay-up. Next slide, please. This is a snapshot on some of the work we have won this quarter. And we have had a book-to-build of -- in quarter 3 of NOK 3.9 billion. And after balance, as we said, we have added approximately NOK 3 billion. So a high order intake in the quarter and also in October. Some of the most important contracts we have won is, we won 3 new contracts with Petrobras for 3 RSVs commencing then, 2 of them in first quarter next year and the other one in August. And with the total estimated revenue of $253 million. And that is a quite good increase in rate levels compared these 3 boats are working on same type of RSVs countries. Now it's a fairly decent increase in margins and rate levels. Then another one worth mentioning is that we won a sort of T&I SURF contract in the on a field called Leviathan, Israel and where we will use Skandi Acergy and with revenue of around $22 billion. It's a 45-day project, and it's an important strategic win for us, building a track record in this segment. So Acergy will do that on her way back from Australia. She's coming back from Australia from another T&I SURF project. She will [indiscernible] in quarter 1 and she will stop in the month doing these project after. Then we are very proud of this Esso FSV contract, it's for 2 vessels spuds in Guyana, and we believe Guyana is one of the most exciting oil and gas provinces in the world today. High field development and a very interesting country to be in, and we expect to grow more in that region going forward. So a very strategic, important contract for us. Also revenue around $250 million over 3 years and really forward to commence that contract. One of the boats will start later this quarter and then the next one in quarter 1 next year. We've done a smaller contract, but important for the [indiscernible] and backlog in especially in quarter 4, where we have reduced the spot North Sea and closed on gaps on the Skandi Constructor. And so for these ports, we expect a minimum 90 days on the Iceman and Hywind and around 45 days on the Constructor and with a revenue of around $25 billion, of course. And that we'll talk a bit more about that later, but that more or less gives us very high utilization on the entire Subsea fleet and also gives us 0 spot exposure on anchor handlers we have in the fleet in quarter 4. So an important contract to maximize utilization in quarter 4 and into first quarter next year. Then we move to the next one, please. This is an old one showing where we are operating and what we operate from 6 continents. We -- 20 offices globally, as mentioned, 54 boats in operation and close to 4,000 employees. We also own one of the world's largest ROV fleets and 2 AUVs ROVs, so 70 ROVs and 2 AUVs, operating mainly from our own fleet around the globe. And what we do, we do marine services globally, and then we do subsea services globally. So project management, engineering, survey, ROV, construction, construction support, SURF, and so on globally. And as you see, the biggest hub for us is in North America, Brazil, but also a small office in Argentina; APAC, where we operate 7 boats; and North America, where we will have 6 boats that is Canada, U.S. Gulf and now Guyana and then the Atlantic region offices in Norway and U.K., but also then in Luanda. Then we move to next one. This is a new slide we have put together. So -- and I'm giving a few snapshots, this is not everything we have done in the quarter, but it's giving a few snapshots on what subsea services we have executed in the quarter. So a few examples of that, of course, there is much more than that, but giving a flavor of the scope of work we are doing globally. So in Canada, we have Vinland doing IRM to see us on the 10-year contract where we do engineering, ROV work, survey work and a bit of construction support. We have -- in Brazil, we had some of the projects in Brazil. Of course, we have 24 ports in Brazil. So not mentioned all, but we have a very important project for us is an inspection program executed for Petrobras called PIDF where we operate, as we speak, 2 boats, will increase to 3, and it's a very successful project for us. We also operate 6 very large pipe layers in Brazil and all of them now on long-term contracts. In Brazil, of course, we also operate the diving boat, some more IRM scopes and of course, a market leader in [indiscernible] in Brazil. In the Atlantic region, we have done a few very important projects. I think the first we want to mention is the largest floating offshore wind farm, Hywind Tampen, where DOF Subsea has been doing all marine operations for that project. So we have in the quarter, we finalized Phase 1, have installed now 7 units and then we'll install 4 in quarter 2 next year. And we do ensure some we do offshore mooring, we do engineering, we do the whole scope of marine operations on that project. We've also done a few more projects in the North Sea and also then we have done the wind farm support on a fixed -- bottom fixed form in the quarter with Skandi Acergy and done quite a bit of decom work also in the region. In West Africa, we have had Skandi Constructor in Gabon doing SURF project for an FPSO in the region. And we have a long-term contract with Eni in Angola, where we do, what we call, field support, which is, let's say, special, we do everything from engineering to construction work and survey work to AUV work to a bit of SURF work. So we used the spread to its full capacities. In APAC, we have done IRM, which is Skandi Hawkey in the Philippines. We have Skandi Hercules doing decom work and construction work. And then on the Singapore, we have done IRM. And as mentioned previously in quarter 4 Skandi Acergy will mobilize to APAC to do a fairly large SURF project for beach in the first quarter next year. So this is a snapshot just explaining that DOF is one of the largest players, especially in subsea services, especially IRM, field support and globally and that we also do now take some steps on the SURF side and so on. So then we move to the next one, please. Yes, I will not spend much time on this. This is the ESG performance in quarter 3. So, consistent with the previous quarter and perhaps worth mentioning is the operational uptime on vessels and ROVs, which we see we have had good performance in the quarter with 99.5% technical uptime on the vessels and 99.4% on the ROVs. Then next one, please. Then I'll leave it to our CFO, Hilde Dronen. Please, Hilde.

Thank you, Mons. I will start the presentation on our repetition of the main terms of the restructuring. And just to repeat the key principle for the restructuring, which we informed or actually has informed during the entire restructuring negotiations, and that is to keep DOF as one group, and in particular, to control our ownership in DOF Subsea. And then secondly, that the treatment of the -- all the shareholders shall be on equal terms. Just a quick summary on what we have -- what the numbers are so far. Our conversion of a debt of approximately NOK 6.2 billion, which is slightly higher than what we presented in June, mainly due to increased debt due to FX and accumulated interest. Approximately NOK 700 million will be reinstated as a bond with maturity in December 2027. There will be established a syndicated loan in DOF Subsea. The DOF Rederi fleet loan will be refinanced with softer terms, that means mainly reduced interest costs and lower amortization with maturity in January 2026. BNDES has accepted to split the DOF guarantee tranche in a 70% guarantee tranche and an unguaranteed tranche of 30%. Iceman AS, which owns Skandi Iceman, now fully owned by DOF ASA will be refinanced with a new loan of NOK 250 million. The equity split will be 53.3% to the bondholders, 42.7% to the secured lenders and 4% for the existing shareholders. The reason why the bondholders have the largest ownership of the restructuring is due to the value of the debt that they have in DOF Subsea. And as already mentioned by Mons, we have sent summons to the -- for a bondholder meetings to be held on the 7th of November and a notice to EGM to be hold on the 11th of November. Next, please. When we send the press release on the restructuring in June, we told the market that if this restructuring will not be approved in the shareholders' meeting, then the parties need to sit down and agree on alternative steps. That was agreed and signed on the 13th of October by the parties, meaning the secured lenders and 40% of the bondholders. So if there is no -- if we don't have the necessary votes on the EGM, then there will be -- then the company will file for reconstruction with the existing group shareholders retaining 1% of the shares, unless otherwise agreed among the group's creditors. Then we need a 50% majority vote to vote in favor of our reconstruction or our restructuring based on the debt in the holding company only. Step 2, if we don't have the necessary votes on the second EGM, then the implementation will done via bankruptcy proceedings with the existing shareholders retaining no equity interest. So in other words, the best proposal is presented or will be presented in the EGM on the 11th of November, meaning 4% of the company. So the best recovery for the shareholders is to support the restructuring at the coming EGM. We have done some updated values and debt after the restructuring and all the numbers here are based on debt per end of this quarter and also based on broker values received from 2 independent broker companies by end of the quarter. And we have also measured EBITDA the last 12 months, meaning from September last year to September this year. If we compare with what we presented in June, the total debt of DOF, excluding DOFCON, has increased mainly due to accumulated interest and FX. The broker estimates has also increased, which also are in dollar. If we take the average increase of broker estimates from this quarter -- during this quarter, the increase is approximately 2%. The loan-to-value post restructuring for DOF Subsea is close to 80%, meaning 78%. So if we look at the loan-to-value numbers, it's still high on DOF Subsea. The company that is pretty healthy here is DOFCON, which is not part of the restructuring. If you look at the multiples, the results from DOF Subsea has improved compared to what we presented in June, given a multiple of 5.3x on DOF Subsea excluding DOFCON. If you look at DOF Rederi, the remaining debt will be NOK 1.5 billion. Updated broker estimate is NOK 2.4 billion. But the revenue from both DOF Rederi and DOF ASA is more or less the same as we presented in June, if we take the last 12 months, given their more or less the same multiple. If we do the same at Norskan, the debt has increased due to an increased U.S. dollar. Brokers' estimates is more or less at the same level, giving a loan-to-value above 100%, and the multiple is close to the same as we presented in June. The gross debt post-transaction is NOK 19.4 billion. If we reduced with equity, the net debt is NOK 17 billion compared to around NOK 16 million as we presented in June. So that is a summary of the restructuring. So then we go going into the financials. All the financial numbers that we show here is based on management reporting, meaning that the proportional share of the DOFCON is included in all the numbers. Total EBITDA of NOK 1.030 billion compared to NOK 865 million. And as you can see, the average utilization of the fleet is pretty good on the PSV segment, its slightly lower on the anchor handler and it's very good on the subsea and especially on the project fleet. If we take DOF Subsea portion of the gross EBITDA, it's around NOK 800 million. And DOF Supply, meaning Norskan and DOF Rederi is NOK 230 million for this quarter. The average utilization for the DOF Subsea fleet is 95% versus 83%. The PSV has had stable operation. We had none vessels in lay-up, and we have some vessels partly exposed to the North Sea spot market. Stable operations in Brazil, but high costs and variable utilization in North Sea, especially after Skandi Iceman completed the Hywind Tampen project. And again, high activity in Subsea, continued good performance in Brazil and Atlantic regions and improved activity in North America and Asia, and stable operations from the PLSV fleet. And all the vessels are now on firm contracts. Next, please. If you look at the total P&L, the operational EBITDA is NOK 1.011 billion. And if you include the gain from sale of assets, it's NOK 1.030 million versus NOK 865 million last year. And as you can see, the operating revenue has increased significantly, and that's especially related to our subsea activity. You can also see that on accumulated revenue where you see NOK 7.5 million versus NOK 5.5 million and EBITDA of NOK 2.645 million versus NOK 2 billion last year. The depreciation is around at the same level as last year, and no impairments done this quarter. If you -- and that gives a NOK 678 million in operating profit versus NOK 488 million and NOK 1.5 billion in EBIT versus NOK 681 million, whereof NOK 400 million was impairments last year and NOK 93 million so for this year. If you look at the financial costs, it's NOK 1.1 billion negative versus NOK 671 million. The financial costs has increased due to accumulated interest and extra costs related to the restructuring. But the largest number here is unrealized currency loss on long-term debt due to a significant strengthened U.S. dollar, both towards NOK and also towards Brazilian reals. Net result negative with NOK 519 million versus NOK 128 million last year and year-to-date, a negative result of NOK 1 billion. So then we go to next. If you look at the 3 segments, the PSV segment is more or less in line with last year. So in reality, the result from the PSV is better than last year because we have less vessels in operations this quarter versus the same quarter last year. The anchor handler, we have improved EBITDA, but the margin is lower, partly due to high costs for the fleet in Brazil. If you look at the Subsea, a significant improved EBITDA due to increased activity. You also see that on the revenue. But the margin is lower, and that is due to more vessels on projects than on firm contracts on time charter contracts. You can also see that the EBITDA contribution from our subsea activity is continuing to increase. Here you can see the DOF Subsea Group segments where we split the revenue and EBITDA in long-term chartering and Subsea IMR segments. And the margin is 26% on this activity, which is increasing and better than previous quarters. The revenue is also increasing on this segment of NOK 1.7 billion, giving an EBITDA of NOK 437 million. And the backlog is also increasing. And the most important add-ons this quarter is the RSV contract in Brazil, and this backlog does not include the contract recently awarded in Guyana, which is after balance date. And here, we have close to 1,700 employees and 15 vessels in operation. If you look at the long-term chartering, the revenue is NOK 500 million and EBITDA of NOK 363 million, and the remaining backlog is NOK 5.4 billion. Here, you have our 7 PLSVs and 1 diving vessels operating on a long-term contract in South America. The margin in this activity is expected to be above 70%, which it is here of 72%. So on the balance, the long-term assets or noncurrent assets has increased. And that is mainly due to FX. We have several subsidiaries where the dollar is the functional currency, and that has impacted the current assets with around NOK 800 million in increased values. The other variances are depreciation and CapEx added and the CapEx is basically maintenance CapEx. On the deferred taxes, that is, in fact, only related to the DOFCON JV. The receivables is high -- continuing to be high due to high activity in the subsea regions. And the cash position has improved, that's mainly coming from the subsea activities, and that is related to working capital, which has seasonal variations. So in this quarter, we have built cash in this part of the business. The equity is negative by NOK 2.2 billion, and that is due to continuing weak results also this quarter. If you look at the non-current interest bearing debt of approximately NOK 3.9 billion, that is the debt in DOFCON, which is not part of the restructuring. The current portion of debt of NOK 22 billion represent the debt that is currently part of the restructuring. And what I think is important to mention here is that this debt since year-end has increased by NOK 3 billion. The reason for that is accumulated interest not paid and FX. The split of this current portion is holding debt, meaning that in DOF ASA of NOK 1.4 billion. Its DOF Subsea, secured and unsecured of NOK 11.3 billion. It's DOF Rederi secured debt of NOK 3.4 billion and it's Norskan debt by NOK 5.9 billion. If we look at the cash flow, the cash flow from operating activities is NOK 762 million versus NOK 670 million and the less -- we have less working capital tied up in the quarter. And as mentioned, that comes from DOF Subsea, and that is based on seasonal variations and it can increase and it can reduce. We have -- what we have paid of interest is NOK 98 million versus a cost of above NOK 400 million, and that is due to the standstill. So capitalized interest costs in this quarter is approximately NOK 300 million. Net cash from investing activities is NOK 99 million. No big events here, only maintenance CapEx and sale from subsea assets and completion of the sale of Geosea, which was published already first quarter. So that has given a positive effect of NOK 26 million and NOK 80 million this quarter. If you look at the repayment of borrowings, we have debt service, normal debt service at DOFCON, and we have some debt service in Norskan and in DOF Subsea and also repayment of the loan of Geosea after the vessel was delivered to new owners. So then we go to next. Here you see the historical performance of the group. And we are, of course, glad to see that the EBITDA is better than the last 4 quarters. But it's also important to mention that the equity has gone from NOK 6.2 billion in 2018 to minus NOK 2.2 billion. Also important to emphasize that the net interest bearing debt has increased from NOK 20.4 billion in 2018 to NOK 23.2 billion by end of this quarter. So we have not, let's say, from 2019, been able to service our group's debt normally until now. If you look at group key financials, it's good to see that the revenue is increasing, the last 12 months EBITDA increasing and also that the firm backlog is increasing. And the firm backlog you see here is the backlog by end of the quarter. So then I give the word over to Mons.

Thank you, Hilde. A few comments on the market and the outlook for the next quarter. In -- this slide shows is done by offshore vessel report and shows expected demand for our type of boats the next few years. And as you see from the slide, we expect -- this report expects the offshore demand in oil and gas for vessels to increase the next 3 years. Likewise, we expect the demand in -- on the renewable offshore wind to also increase. So we expect high activity and utilization in the offshore fleet, the next few years. So we see -- give the reason to be fairly optimistic on the market going forward. When we look at the next slide, please, on the outlook and a bit comments on the market. On the PSV side, the North Sea spot market has softened during quarter 3. And we expect the market to be volatile in quarter 4, where we could see periods of decent rates, but also periods where the utilization are lower. What we have our exposure is that we expect to have, on average, 2 vessels trading in North Sea spot market in quarter 4. So a fairly limited exposure for us in that market. Long-term rates in the PSV segment is still at good levels and we expect them to stay at good levels. On the anchor handling side, after a good summer and quarter 2, we saw the North Sea spot weakening in quarter 3, especially August onwards. And as we speak yesterday or today, the rate levels today is between GBP 10,000 and GBP 15,000 and quite a few boat -- sitting idle boat in Norway and in U.K. We expect the market to be soft and volatile in the North Sea spot in quarter 4. And our exposure to that is very limited. We -- after recent awards we announced yesterday, we have full coverage on the anchor handling fleet in November and December. So we will have very little exposure to that. And then on the subsea side, we have a very good backlog for quarter 4 and very limited unsold capacity. So we expect a lower, let's say, what you can call seasonal variation in quarter 4 compared to previous years. So we expect -- and as a consequence of that, we mentioned that we have a backlog by end of September for quarter 4 at NOK 2.6 billion compared to the turnover in quarter 2 of NOK 2.8 billion. And then we have built further backlog done with the Esso Guyana contract and also the contract recently announced yesterday. So it means that we will have -- we have a very high backlog for quarter 4. And the backlog at balance date for '23 was NOK 8.4 billion. Also that have no increase. So it's a very good starting point for '23. As a consequence of the above, we say that the operational EBITDA in quarter 4 is expected to be in line or slightly weaker than in quarter 3. So as a consequent, we expect operationally that quarter 4 will be a good quarter for us. On the financial, of course, this is a repeat to what we have said earlier in the presentation. It's NOK 22 billion of the debt is classified as short term. And in absence of a restructuring these steps will mature with immediate effect. And as mentioned, it's impossible to refinance that debt with other sources. The restructuring agreement signed with the lenders remains to be approved by the bondholders and the shareholders in November. And as Hilde have showed on the slide, the alternative implementation steps have been agreed if the restructuring is not approved. The group firmly believe that the bondholders and the shareholders will obtain the best recovery by supporting the restructuring at the bondholders meeting on 7th November and at EGM on 11th November. Next, please. That was the end of the presentation. We have been do some Q&A. And so we kind of ask you to send us written questions on the -- through the system here.

We have a few questions received before we start the presentation and should just be start by answering them. And then we'll look at the questions, if any, receive in the presentation. So I'll start with a few questions received the other day. They are -- and the questions are in Norwegian, but I'll try to translate. And the first question is, why we cannot do an IPO in DOF Subsea and reduced ownership in DOF Subsea? The answer to that is that this would be a much worse solution for DOF and the DOF shareholders, losing ownership in DOF Subsea and then still being exposed to at least the same dilution due to conversion of debt in other silos. Meaning as Hilde showed you on a slide, the holding debt, the debt in DOF ASA, the debt DOF Rederi, part of the debt in Iceman, meaning that there will be close to NOK 3 billion needed to be converted in the DOF Group, DOF Subsea. So the dilution will be the same. So we don't think that is a good alternative at all and a much worse alternative for the group and for the shareholders. Then second question is, why we cannot sell assets to pay the most impatient bond owners. The fact is that no order bond on us, of course, we negotiate discussed this with ad hoc representing all bondholders. And the fact is that all bond loans are -- will mature and will have to be repaid in the absence of a restructuring. So, meaning that we have to raise several billion NOK to be able to do that. And Hilde showed in the presentation that before conversion of that, of course, the loan-to-value or the gearing level of the group, in some silos, the debt is higher than the value on the assets and meaning that we would likely not be able to -- even if we sold most of all the assets, we'll be able to get cash to repay the entire bond books. So we also have to think that this is a mature solution and what we have been able to negotiate. Then the third question here is, if there has been done reverse impairment on the vessels values that are on -- that have won new long-term contracts in '22. The answer to that is that due to the financial position of the group, there has been done no reverse impairments in so far this year. But as a comment, it's not really relevant for the restructuring as the restructuring is mainly liquidity and a funding issue. As mentioned several times there is NOK 22 billion in debt that we fall due in the absence of yes in the EDM. And as said, this is impossible to refinance. Then Hilde, I have one question for you, which is if it will be [Foreign Language]. So try to translate that to English.

Yes. Yes, the question is, will there be called for a new EGM immediately after a negative vote or that we don't have the necessary votes to approve the restructuring on the 11th of November due to a decision on an investigation. And our answer is that a decision of an investigation will not have an impact or stopped the restructuring. If the restructuring is approved, it will be completed, regardless of the investigation. If the investigation -- if the restructuring is not approved, the alternative plan will become applicable regardless of the investigation. If the proposed investigation is adopted by more than 10% of the represented shareholders on the general meeting, there is a basis for any shareholder to file a motion to the court for such investigation. This decision will not impact on any of the other decisions or obligations.

Thank you, Hilde. And then we have also before the presentation received a couple of other questions. And first question is, has the [indiscernible] owner or close relatives agreed or planned to purchase converted shares from banks or bondholders. If you don't know, are you willing to ask them? So Hilde, could you please answer that one?

Yes, we will certainly willing to ask them. But we have no knowledge that there is any agreements between the banks or the bondholders with -- and the Mogster family to purchase converted shares. And the key principle, again, as I said before, for the restructuring is equal treatment of all shareholders. What we have also answered earlier is that the Mogster family, they own bonds, but that is a small portion and it represents between 3% and 4% after the restructuring. And then we have a second question. The restructuring proposal is that debt should be converted into shares where the conversion rate is calculated with 15 decimal places, how has it been possible for you to calculate that we get exactly 1% if we do not accept the restructure proposal of 4%? So the answer to that is that the percentage to existing shareholders in this scenario, meaning if the original proposal with 4% of the existing shares is not approved, is based on what the creditors have been willing to accept, not any calculation. The reason being that the only alternative in such scenario then will be a bankruptcy and off, whereby the existing shareholders received nothing. So the creditors, they are actually taking into account that the equity is lost. So that's the answer.

That was the question we had received before the presentation. And then, I guess, we have -- see if we would have received quite a few questions, I think.

Yes. The first question is DOF has announced a 3-year contract for Chief, Olympia and Commander. What is the annual EBITDA for these contracts, what is the expected EBITDA for DOF Rederi in 2023? You can perhaps say some words on the contract Mons, but we cannot guide on specific companies going forward. But what I can say is that as we stated in the notice to the EGM, we said that for DOF Rederi to have a kind of normal debt service, they needed EBITDA of approximately NOK 750 million. And these contracts definitely helps on the EBITDA, which currently is below NOK 300 million. But we are very far from an EBITDA on what we -- to reach NOK 750 million.

Perhaps on the margins and EBITDA from these contracts, of course, for the group, we have several part of the groups involved in the contracts, DOF Rederi owns the boats. Norskan have the boats, and some [ bear ] boat and do the marine management including other boats. DOF Subsea been for too long provide ROVs and ROV services. And what is also called Commander in this, will also provide AUV services. What we have in total for the group, we expect our owned -- and this is circa numbers. So between $5 million and $5.5 million in EBITDA on those spreads for the group. And of course, the majority of that will be on the vessels.

Okay. And then next question is the DOFCON JV. What is the expected cash flow for DOFCON JV to DOF Subsea in 2023? That's question number one, I can answer that. And that is we do expect to receive dividend from the DOFCON JV. I don't have the exact numbers, but we do expect the dividend payments or repayment of our shareholder loans to continue. However, all the cash will be go directly to the creditors. So any dividend from the DOFCON JV goes to the creditors, meaning mainly the secured lenders. And the next question is it true that Skandi Acu has a chance to be win a Petrobras tender with day rate of approximately $360,000 a day. I guess you can answer that, Mons.

Yes. What was true is, of course, that Petrobras issued a tender some months back and for 2 type of vessels, ultra-deepwater and deepwater and also done for Brazilian flag and with international flag. And we have bid Skandi Acu on the ultra-deepwater with Brazilian flag. And we also bid a boat with international flag on the same ultra-deepwater. And the rates we bid on the -- with Brazilian flag was, as mentioned, around $360,000 a day. What the competition bid on -- both with the international flag for ultra-deepwater was in the 290s. So it is too early to say that we will be successful on winning this. And of course, what rate levels is impossible to achieve. So it's likely or not likely it is difficult to say today what the outcome on that will be on, let's say, complicating factor is that the Petrobras commands the new tender has commencement in the summer of '23. But Acu is, of course, on an existing contract, as you know, today into '24. So DOFCOM, far too early to say the fact is that we are bid. What I've told you now is public on the rates and the competition and then I think there will be a negotiation and where we are in the end, I couldn't -- I don't know. And it also often with Petrobras of course, they have a budget before they enter the market because this also will depend on what budget they have for this. But we -- of course, we'll do our best to secure this contract. But as I say, it's more uncertain and complicated this standard and then -- so meaning that it's difficult to say and predict what DOFCON will be.

Okay. I'll go to the next. There's a lot of questions there. And that's a question on EBITDA. What is the average EBITDA for the contracts awarded in 2022? And what is the expected -- total EBITDA expected by management in '22 and '23 and also what is it for DOF Subsea? We don't give guidance on earnings other than we do in the quarterly reports. So that's the quick answer on that one. The next one, does DOF still have a DOF deepwater guarantee? And the answer is no, because we made an agreement already in 2020. So the DOF guarantee is actually a debt in DOF ASA of approximately NOK 500 million. And that debt is planned to be converted. Next question, is DOF share in Skandi get sold to Paraty? How much did DOF get for this year in Angra? We received approximately NOK 6 million for the shares. And what is the total value of contracts options? Perhaps you should say a few words around that, Mons?

The total value of…

contract options, that's I'm not sure if it's possible.

No, if it didn't show that in the presentation, I don't have that number in front of me.