Singapore’s Rickmers revises restructuring plan for 8.45% notes

By Angela McDaniels

Tacoma, Wash., Sept. 21 – Rickmers Maritime announced a revised restructuring plan for its S$100 million 8.45% notes due May 15, 2017 after receiving feedback from noteholders at an informal meeting on Sept. 15.

“One of the key suggestions raised at the informal meeting was for a more substantial debt to equity swap, which requires unitholders’ approval at an extraordinary general meeting. We can’t be sure that unitholders will approve the dilution, but we will try. In the essence of time, we will run both processes to seek unitholders’ and noteholders’ consents in parallel,” chief executive officer Soeren Andersen said in a news release.

Rickmers plans to seek the approval of noteholders via a consent solicitation to

• Redeem S$60 million of the notes in exchange for 60% of the enlarged units of the company;

• Extend the maturity of the remaining S$40 million of notes to November 2023; and

• Reduce the coupon to 2.7%, which would step up to 3.3% in November 2019, 3.9% in November 2020, 4.5% in November 2021 and 5.2% in November 2022.

The 1,319,434,076 new units to be issued in the partial redemption would have an issue price of S$0.04574 each, which is a 12.4% discount to the volume-weighted average price per unit on Sept. 21.

In support of the proposed restructuring, Rickmers Holding AG, the sponsor of Rickmers Maritime holding 34.2% of its units, has indicated that it will vote in favor of the resolution to issue the new units.

The company has received an offer from its senior lenders to restructure its loan with a $260.2 million facility due 2021. The restructuring of the loan is contingent, among other things, on restructuring the notes.

Alternative proposal

In the event the unitholders do not approve the dilution, the company is making an alternative proposal to the noteholders to achieve a restructuring of the notes.

The terms of the alternative proposal will be the same as the terms of the proposed restructuring except that 175,924,543 new units, or 16.7% of the enlarged units of the company, will be issued to the noteholders at an issue price of S$0.341 per unit and the approval of unitholders for the issuance will no longer be required.

If the proposed issue is not approved by unitholders and/or the proposed restructuring is not approved by the noteholders at a noteholder meeting or the alternative proposal is not approved by the noteholders, the new facility will not be extended to the company and the company will not have enough cash to meet its principal repayment obligations under one of the existing facilities that are already due (but are presently waived) and a further amount of $179.7 million due on March 31, 2017 under the same facility.

The company said is also unlikely to be able to pay interest on the notes or repay them at maturity.

As a result, the company will be in default under the facilities and the notes, it will no longer be able to operate on a going concern basis and it faces a potential winding up.

Previous proposal

As previously reported, the company had proposed exchanging the notes for S$28 million of new unsecured fixed-rate step-up perpetual convertible securities, according to a noteholder presentation filed with the Singapore Exchange.

The new securities would have had a 3.88% coupon in years one through three, 4.76% in year four, 5.64% in year five, 6.52% in year six, 7.4% in year seven and 8.28% from year eight onward.

The new securities would have been convertible into about 20% of the existing units outstanding for an expected value of about S$40 million at issuance.

On Sept. 14, the company said that it expected the bondholder meeting to be held around Oct. 18 and that it would issue a notice of meeting and consent solicitation statement around Sept. 26.

The holders of at least 75% of the notes must attend the meeting in person or by proxy in order to form a quorum, and at least 75% of the votes cast at the meeting must be in favor of the resolution in order for it to pass.

The notes were issued by Rickmers Trust Management Ptd. Ltd., which is the trustee-manager of Rickmers Maritime.

Based in Singapore, Rickmers Maritime is a container ship operator and charterer.

© 2015 Prospect News.
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