General Maritime: Bid procedures, equity commitment, DIP financing approved

By Lisa Kerner

Charlotte, N.C., Dec. 15 - General Maritime Corp.'s bid procedures for the sale of substantially all of its assets were approved, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company would sell the assets if a trigger event occurs under its debtor-in-possession credit agreement.

As previously reported, the sale motion covers only a scenario under which a plan of reorganization based on a proposed $175 million equity commitment agreement is not confirmed.

If a trigger event occurs, the company said it would either immediately enter into an asset purchase agreement providing for the credit bid of the claims of its pre-bankruptcy senior lenders and DIP financing lenders or enter into a stalking horse agreement with an alternative bidder within 10 days of the trigger event.

Any alternative stalking horse bid must provide for payment in full of the facilities.

If the senior lenders are not the high bidder for the assets at auction, General Maritime will pay them a break-up fee of 1% of the purchase price and reimburse their bid negotiation-related expenses.

The bidding deadline would be noon ET 70 days after the trigger event. Minimum bids must be for at least $500,000 more in cash than the stalking horse bid, plus the amount of the break-up fee and expense reimbursement.

All bids must include a 10% deposit.

Equity commitment approved

The court also approved the debtors' request for court approval of an equity commitment agreement with Oaktree Capital Management,

The official committee of unsecured creditors objected to the request for approval.

In May 2011, the debtors completed a $200 million third-lien financing with two Oaktree Capital Management affiliates. Oaktree was granted a third lien on substantially all of the debtors' assets and given warrants for up to 19.9% of the debtors' common stock.

Cash collateral used OK'd

General Maritime also received final approval to use up to $100 million of DIP financing from a group of lenders led by Nordea as administrative agent.

The initial amount of the DIP loan is $75 million, but provides General Maritime access to another $25 million of future financing, subject to the applicable lenders' agreement and other conditions.

As previously reported, the facility will mature on the earliest of nine months from the bankruptcy filing date with a three-month extension option, the effective date of a Chapter 11 plan and the closing of a sale.

Interest will accrue at the adjusted eurodollar rate plus 650 basis points, with a 1.5% floor. If the borrowers exercise the extension option, the interest rate will be the adjusted eurodollar rate plus 700 bps, also with a 1.5% floor.

General Maritime is a New York-based provider of international seaborne crude oil transportation services. The company filed for bankruptcy on Nov. 17. The Chapter 11 case number is 11-15285.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.