Container ship operator Rickmers Maritime Trust has been thrown a lifeline in the form of a refinancing deal, as restructuring efforts in the beleaguered shipping industry continue.
The trustee-manager said yesterday that the trust - which owns and operates 16 container vessels - has been offered a restructured secured amortising term loan facility of up to US$260.2 million (S$350 million) to refinance all of its outstanding debt.
The new facility, offered by the senior lenders of the HSH syndicate, which comprises HSH Nordbank AG (Singapore) and DBS, could extend the maturities of a large part of the trust's secured bank debts to the first quarter of 2021.
It also includes a moratorium on principal repayments under the existing facilities to the fourth quarter of this year, and is conditional on factors such as a successful restructuring of the $100 million, 8.45 per cent notes due in May 2017.
The trust reported a net loss of US$55.6 million in the second quarter to June 30, widening from a net loss of US$15.7 million in the same period a year ago.
The trustee-manager added that the trust is also looking at a debt exchange with its noteholders: it will offer new unsecured $28 million fixed-rate step-up perpetual convertible securities in place of the existing principal amount of the notes and subsequent due interest.
EYE ON LONG TERM
We have to fix the balance sheet first, and this is essential to ensuring the long-term solvency of the business. It's a difficult time for the shipping industry, no doubt... but we want to be among those left standing.
MR SOEREN ANDERSEN, chief executive of the trustee-manager.
These perpetual convertible securities will be convertible at any time into units of the trust at a fixed conversion price, subject to adjustment for various events.
"The proposed debt exchange will align the interests of all stakeholders and allow them the benefit of any upside resulting from an improvement in the market environment and charter rates," said the trustee-manager.
Mr Soeren Andersen, chief executive of the trustee-manager, told The Straits Times: "We have to fix the balance sheet first, and this is essential to ensuring the long-term solvency of the business. It's a difficult time for the shipping industry, no doubt... but we want to be among those left standing."
In a notable move to lower costs, the trust laid up three of its vessels at Batu Pahat, Malaysia, last week. "This will bring our costs down significantly on those vessels, while giving us the option to reactivate them at a later stage when the market gets better," he said.
Meanwhile, in the offshore marine sector, Vallianz Holdings said in a statement early yesterday that Swiber Holdings, now under judicial management, has pledged its 25.15 per cent stake in Vallianz to its lead creditor DBS Bank.
Vallianz's market capitalisation stood at $71.8 million as at yesterday, according to Bloomberg. This brings DBS's charge over the Vallianz shares to be about $18.1 million.