Rickmers postpones bond holders' meet due to low turnout

If note holders do not give the proposed restructuring the green light, Rickmers Maritime is likely to cease operating and may eventually wind up.
If note holders do not give the proposed restructuring the green light, Rickmers Maritime is likely to cease operating and may eventually wind up.ST PHOTO: MARCUS TAN

Meeting delayed for at least two weeks as attendance rate not enough to vote on restructuring of $100m notes

Troubled container ship operator Rickmers Maritime has adjourned a meeting for its bond holders for at least two weeks because not enough of them turned up.

The meeting yesterday did not achieve the quorum needed for note holders to have voted on the proposed restructuring of $100 million 8.45 per cent notes due next year.

Note holders with only about $65.5 million in principal amount of the notes attended the meeting, either in person or by proxy - less than the 75 per cent quorum threshold, said trustee-manager Rickmers Trust Management.

This means no voting on the proposed restructuring was held. The meeting is now set to take place between Nov 23 and Dec 21 instead.

The meeting had been convened for note holders to vote on the proposed swap of the $100 million worth of notes due next May for $40 million worth of notes due in November 2023. The rest of the principal sum would be exchanged for 60 per cent of the trust, after the issuance of 1.32 billion new units.

The trustee-manager last month said it received a letter from a group of bond holders demanding the immediate payment of their share of the $100 million notes.

A successful restructuring would allow Rickmers Maritime to obtain a new term loan facility of up to US$260.2 million (S$362 million) from a consortium of banks to refinance all of its outstanding debt.

But if note holders do not give the proposed restructuring the green light, Rickmers is likely to cease operating and may eventually wind up. Unit holders have already given approval for the trust to be liquidated, should the restructuring be unsuccessful.

The trustee-manager said yesterday it will also hold dialogues with note holders in the coming weeks to help them better evaluate the proposed restructuring.

"Note holders may need more time to evaluate the restructuring proposal. In the meantime, we will continue to engage note holders, through small group meetings, with the objective of addressing (their) concerns more effectively," said Mr Soeren Andersen, chief executive of the trustee-manager.

"There are critical consequences if we are unable to come to a decision soon as the cash levels in two of our silos are almost depleted, threatening Rickmers Maritime's ability to continue operating as a going concern."

Still, Mr Andersen said in a briefing, there are no plans to revise the terms of the proposed restructuring.

He also said the trust is unlikely to be able fulfil a coupon payment due next Tuesday. "At the end of the day, we will aim to refinance the bonds in due course when the market improves... depending on what's available at that stage."

"The trust needs to get into a shape where we can grow. We need to add to our revenue, and that growth will come from raising equity," said Mr Andersen. "But it's premature to talk about that now because there's no way we can grow or raise any sort of capital before we fix the (notes) and senior debt."

A note holder, who declined to be named, told The Straits Times: "I don't think anything will really come out of all this. Unless there's a new package that offers fairer and more reasonable terms to the bond holders, there is not much reason for me to engage them in discussion."

Rickmers units finished 0.2 cent, or 6.7 per cent, lower at 2.8 cents yesterday after the announcement.

A version of this article appeared in the print edition of The Straits Times on November 10, 2016, with the headline 'Rickmers postpones bond holders' meet due to low turnout'. Print Edition | Subscribe