The largest senior lender to troubled shipping trust Rickmers Maritime, German-based HSH Nordbank, has said it is willing to consider a "material debt forgiveness" of loans it has extended to the trust.
But this is only if the trust can secure similar, substantial debt forgiveness from its bond holders and its other unsecured creditors, and raise additional equity, said the trustee-manager Rickmers Management Trust yesterday.
Also, this is on the condition the bank's recovery sum would be higher than that from an immediate winding-up of the trust, and that the recovery of its debt will not be prejudiced by other creditor claims.
In all other scenarios, HSH Nordbank indicated that it would support an orderly winding-up of the trust.
Rickmers' outstanding bank debt stood at US$270.8 million (S$382.6 million) as at Dec 31. It also has an outstanding debt of S$100 million in medium-term notes maturing in May this year. Rickmers bond holders rejected a debt restructuring proposal in December that would have been crucial for the trust to have been able to draw on a US$260.2 million facility for refinancing.
The bond holders had been asked to swap the principal on S$100 million of notes, paying 8.45 per cent, for S$40 million due in November 2023 - with a step-up interest from 2.7 per cent to 5.2 per cent to be paid from 2019 to 2023.
The trustee-manager noted in its statement yesterday that it held discussions with HSH Nordbank last Tuesday to see if the bank's financial adviser had secured a credible alternative restructuring proposal for the notes. The senior lender said its financial adviser's proposed restructuring proposal for the notes was not acceptable, and advised the trustee-manager to come up with a revised restructuring proposal.
As such, the trustee-manager is in discussions with advisers to formulate a new framework for restructuring the liabilities of the trust, and plans to present the proposal to the trust's creditors and bond holders when it has been finalised.
"Given that the trust is formulating a new proposal for the restructuring of its liabilities, the trustee-manager is of the view that there is still basis for the trust to continue and the trust should not be wound up in accordance with its trust deed at this time," it said.
Rickmers units last traded at 26 cents on Nov 15 before trading was suspended - the same day it defaulted on a S$4.26 million interest payment to bond holders.
