Torleif Ernstsen has resigned as Hurtigruten’s CFO, according to a stock exchange announcement from the company Tuesday morning.
He terminated his job on June 30 and will be replaced by James McArthur.
– I am very grateful for my time with the company. In his letter, Ernstsen says the past six years have been exciting and rewarding.
Ernstsen accepted a position in the investment banking division of brokerage house Carnegie.
– I would like to thank Tarif for his contribution to the growth of the company in recent years. He’s been a great partner for me and a great leader for our finance team,” says CEO Daniel Skjeldam.
McArthur, for his part, comes from a background in private equity in both the US and Australia.
Torleif Ernstsen, outgoing CFO of Hurtigruten. (photo: Hurtigruten)
14% interest loan
At the end of February, Hurtigruten announced that it had secured new funding to ensure the shipping company was running after several years of billions in losses.
The interest rate on the loan was six percent, plus the reference Euribor interest rate, plus another six percent interest to be settled with non-cash money. This form of settlement is referred to in financial parlance as “payment in kind”.
With a reference interest rate of 2.7 percent and additional interest charges, Hurtigruten must service the debt at an interest rate of 14.7 percent.
There is no doubt that Hurtigruten has secured financing in a demanding capital market.
By comparison, during bankruptcy proceedings in the USA, SAS managed to place a special form of bridging loan financing – debtor-to-possession financing (Dip financing) – with an interest rate of 9%.
billion deficit
The past few years have been very demanding for Hurtigruten, which has been hit hard by the Corona pandemic.
- In 2020, the pre-tax loss was €164 million (NOK 1.8 billion).
- In 2021, the pre-tax loss was €264 million (NOK 2.9 billion).
For two years, a total of NOK 4.7 billion at today’s euro exchange rate.
Nine months later in 2022, the pre-tax loss amounted to another €129 million before tax – NOK 1.4 billion at today’s euro exchange rate.
A total of more than six billion crowns in the red in less than three years.
In the fourth quarter of 2022, the loss before tax ended at €90.7m, so that the total pre-tax result for the whole of last year minus €219.8m. This corresponds to approximately NOK 2.5 billion.
At the end of last year, book equity was minus 561.9 million euros.
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