Rickmers Maritime Trust receives lawyer's letter demanding repayment from bondholders

A group of bondholders of Rickmers Maritime Trust are filing an acceleration notice with the trustee of Rickmers.
A group of bondholders of Rickmers Maritime Trust are filing an acceleration notice with the trustee of Rickmers.ST PHOTO: JAMIE KOH

SINGAPORE - The trustee-manager of Rickmers Maritime Trust received on Wednesday (Oct 19) a further letter from lawyers, Rajah & Tann Singapore, on behalf of a group of bondholders that is demanding immediate payment of their share of the S$100 million notes which the trust is trying to restructure.

This comes less than two weeks before investors will vote to decide if they want to accept the debt restructuring offer or send Rickmers Maritime into liquidation.

In a filing with the Singapore Exchange on Thursday, Rickmers Trust Management (RTM) said the letter alleged that such holders of the notes "wish to directly take such legal steps and actions against the trust to enforce repayment of the notes, together with accrued interest", on the basis that DB International Trust, the notes' trustee, has "failed to institute any action against the issuer" since a written request purportedly made by holders of the notes on Sept 28 to the notes' trustee to inform the trust that the notes are immediately repayable.

RTM aid it is in the process of validating the contents of the lawyer's letter.

It also said that it has not received any notice from notes' trustee that the notes are immediately due and payable and the lawyer's letter does not provide any evidence that the notes' trustee has become bound to give such notice or that the notes' trustee has failed to do so within a reasonable period

RTM has called for extraordinary general meeting on Oct 31, at which bondholders will vote on RTM's proposed swap of the S$100 million principal 8.45 per cent notes due next May for S$40 million due November 2023, and exchanging the rest for 60 per cent of the trust, after issuing 1.32 billion new units.

The meeting will also consider a resolution to authorise RTM to wind up the trust should it be necessary.

A successful restructuring would enable Rickmers Maritime to obtain a new term loan facility of up to US$260.2 million from a consortium of banks to refinance US$197.7 million and US$67.8 million of the trust's current outstanding debt repayable in 2017 and 2018.

The trust has been hit by double whammy of the container shipping slump and the widening of the Panama Canal that has enabled the transit of ships up to 14,000 twenty-foot equivalent units (TEUs).

Its second quarter net loss widened to US$55.6 million from US$15.7 million a year earlier as revenue shrank to US$18 million from US$28.5 million.