Global Ship Lease holds consent bid for 9 7/8% notes until Dec. 19

By Susanna Moon

Chicago, Dec. 13 – Global Ship Lease, Inc. said it began soliciting consents from a majority of holders to amend its $340 million of outstanding 9 7/8% first priority secured notes due 2022.

The consent solicitation will end at 11:59 p.m. ET on Dec. 19, according to a company update on Thursday.

The issuer said on Dec. 6 that it was asking holders to approve amendments to the notes indenture immediately following the company’s annual mandatory offer to purchase up to $20 million of the notes.

The proposed amendments would bring forward the date beginning on which the company is permitted to pay dividends to common shareholders in a total amount per year equal to 50% of the consolidated net profit after taxes of the company for the preceding financial year to Jan. 1, 2020, rather than Jan. 1, 2021, according to a previous announcement.

The consent fee will be $7.50 per $1,000 principal amount.

The amendments would also include an acknowledgement by holders that the transactions under the agreement and plan of merger dated Oct. 29 with Poseidon Containers Holdings LLC, K&T Marine LLC and the other parties do not constitute a change of control under the indenture.

In addition, the proposed amendments also include the following:

• To provide that only equity issuances for cash will increase the company’s capacity to make distributions to shareholders, and not in-kind contributions to equity;

• To reduce the increases in the amount of permitted transfers of assets or cash from the company and the guarantors of the notes to non-guarantor subsidiaries generated by in-kind contributions to equity to 15% from 100% of the fair market value of these contributions, other than cash which will increase the permitted transfer basket by 100%, and to set the increase in the permitted transfer basket created by the Poseidon transactions at $50 million;

• To regulate in more detail certain intercompany transactions that may take place between the company and the guarantors on the one hand and non-guarantor subsidiaries on the other hand, including with respect to intercompany loans, vessel transfers and vessel management arrangements;

• To extend the company’s annual and quarterly financial reporting to include certain stand-alone financial information of the company and the guarantors on one hand and the non-guarantor subsidiaries on the other; and

• To modify the treatment of beneficial ownership by some permitted holders pursuant to the change of control definition.

Global Ship said the proposed amendments contribute to the integration of the legacy Global Ship Lease entities and the new Poseidon entities and facilitate the unlocking of the growth potential of the Poseidon transactions for the benefit of all of the company’s stakeholders while at the same time reinforcing its support of, and active engagement with, holders of the notes.

As of Dec. 6, the outstanding principal amount of the notes was $360 million, which was then reduced after the annual mandatory offer.

Beneficial owners of about $164.2 million of the principal amount, or about 46%, of the outstanding notes had agreed to consent to the amendments as of the announcement date.

Citibank, NA, London Branch is the trustee and security agent. Global Bondholder Services Corp. (866 807-2200 or 212 430-3774) is the tabulation agent and information agent.

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

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