Global Ship Lease begins tender offer for $28.42 million of 10% notes

By Marisa Wong

Morgantown, W.Va., Feb. 2 – Global Ship Lease, Inc. said it has begun a cash tender offer to purchase up to $28,417,622 of its outstanding 10% first priority secured notes due 2019.

The company is offering to purchase the notes at a price of 102 plus accrued interest to but excluding the purchase date, according to a news release.

The tender offer will expire at 5 p.m. ET on March 14.

The tender offer is made up of two offers: an excess cash flow offer and a collateral sale offer.

The indenture governing the 10% notes requires the company to make an excess cash flow offer to purchase up to $20 million of the notes within 120 days of the end of each fiscal year in which the company has at least $1 million of excess cash flow.

The indenture also requires the company to make a collateral sale offer within 90 days of receiving proceeds from asset sales to purchase the notes and repay outstanding obligations under its revolving credit facility, in each case pro rata in proportion to the aggregate amounts outstanding.

According to the release, Global Ship Lease had at least $20 million of excess cash flow in fiscal year 2015. Additionally, the company completed the sale of Ville d’Aquarius on Nov. 5 for net proceeds of $4,562,144 and the sale of Ville d’Orion on Dec. 8 for net proceeds of $4,655,478. A portion of the asset sale proceeds has been used to repay outstanding debt under the company’s revolver.

If the aggregate amount of notes tendered exceeds the maximum offer amount, the trustee under the notes indenture will select notes to be accepted for purchase on a pro rata basis. Adjustments may be made so that only notes in minimum amounts of $200,000 and integral multiples of $1,000 in excess of that will be purchased.

If the aggregate amount of notes tendered and accepted for purchase is less than the offer cap, any amount less than the maximum offer amount not used for the purchase of notes will be available for the company to use in any way permitted under the indenture.

Tenders may be withdrawn at any time on or prior to the offer expiration date.

Global Ship Lease is a containership charter owner based in London.

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