Havila Shipping proposal changes supported by bondholders and lenders

By Caroline Salls

Pittsburgh, Feb. 12 – Havila Shipping ASA reached a revised restructuring proposal that is supported by the largest holders of all of its bond issues and its bank lenders, according to a notice from bond trustee Nordic Trustee ASA.

Under the revised restructuring proposal:

• NOK 4.5 million of interest on the company’s 2012/2016 senior unsecured bonds (HAVI08) for the years 2016 to 2018 will be paid in cash;

• The company will offer to buy back up to NOK 275 million of the HAVI08 bonds at a price of up to 30% of par in cash as part of a reverse auction;

• An equity issue will be increased to NOK 300 million from NOK 200 million to enable cash payments on the HAVI08 bonds and to facilitate the buyback;

• The Saevick family will maintain its current shareholding, and Havila Holding AS has guaranteed a subscription of NOK 153 million; and

• The new equity will be secured through a private placement toward existing shareholders and new investors. Bondholders wishing to participate in the equity issue will be given preferred allocation before new investors to the extent possible.

Havila said the terms for the restructuring of its 2010/2016 senior secured callable bond issue and 2011/2017 senior secured callable bond issue did not change.

Master agreement deadlines

The company said its master agreement is subject to approval of amendments by bondholders no later than Feb. 15, new equity secured no later than March 15 and completed renegotiation of the charter hire for the “Havila Troll” by Feb. 15.

According to the notice, the company requested an extension of the bondholder approval deadline to align with the new Feb. 26 date for bondholders’ meetings, but the requisite 100% approval was not obtained.

If it does not receive the pre-acceptances from the bondholders by Feb. 15, Havila said it will be forced to evaluate its options, including the feasibility of further negotiations with creditors.

Negotiations for the amendment to the charter are ongoing and are required to be completed by Feb. 15, the notice said.

Refinancing needs

As reported on Jan. 5, the company said it has been significantly impacted by the downturn in the offshore oil industry and foresees “severe” financial challenges for 2016 through 2018.

According to the company, it has no readily available means of refinancing its near-term debt maturities, its cash flow from operations is not enough to meet the current amortization schedules of its debt, and it does not expect the market to improve materially in the short to medium term.

As a result, the company is working toward a refinancing solution that will allow it to maintain enough liquidity to operate through 2018.

Havila provides supply services to the offshore oil and natural gas industry. It is based in Fosnavag, Norway.

© 2015 Prospect News.
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