General Maritime out of bankruptcy with $175 million capital infusion

By Caroline Salls

Pittsburgh, May 17 - General Maritime Corp. has completed its financial restructuring and emerged from Chapter 11 bankruptcy, according to a news release.

According to court documents, the company's plan of reorganization took effect on Thursday.

The plan, confirmed on May 3 by the U.S. Bankruptcy Court for the Southern District of New York, reflects the terms of a global settlement with the company's creditors, provides recovery to unsecured creditors and resolves all disputes among the debtors, the unsecured creditors, the senior secured lenders, holders of more than 57% of the company's senior notes and Oaktree Capital Management, LP.

General Maritime said in Thursday's release that it substantially deleveraged its balance sheet through the restructuring process, positioning the reorganized company to be a financially stronger global enterprise.

In addition, General Maritime said it successfully reduced its outstanding debt by about $600 million and its cash interest expense by $42 million annually.

The company said it has received a new $175 million capital infusion from investment entities affiliated with Oaktree Capital Management, LP.

"Today marks the successful completion of our financial restructuring and the start of a new chapter for our company," General Maritime chief financial officer Jeffrey D. Pribor said in the release.

"With enhanced financial flexibility, we are moving forward as a stronger and more competitive company, better equipped to address the challenges of today's tanker shipping market.

"General Maritime will continue to operate one of the world's largest and most diverse fleets of tankers and is committed to safely and efficiently providing seaborne oil transportation services."

Plan terms

Under the plan

• Oaktree will provide the reorganized company with a new $175 million equity investment, $75 million of which will be used to pay down the company's senior secured first-lien facilities;

• Funds managed by Oaktree will receive 98% of the equity in the reorganized company;

• The key senior lenders will amend their credit facilities to provide the company with an amortization holiday until June 2014, deferring roughly $140 million of cash payments for two and a half years;

• DIP facility claims, administrative claims and priority claims will be paid in full in cash;

• Holders of pre-bankruptcy senior facility claims will each receive pay-downs and a share of new credit facilities;

• Holders against debtors that are not obligated on the company's pre-bankruptcy funded debt obligations will receive any cash available for distribution after all senior claims are paid in full;

• Holders of unsecured claims will share in $6 million in cash, warrants exercisable for up to 3% of the equity in the reorganized company and 2% of the equity in the reorganized company; and

• All existing equity interests will be cancelled and holders will receive no distribution.

Kramer Levin Naftalis & Frankel LLP is serving as the company's legal adviser, and Moelis & Co. is serving as the company's financial adviser, the release said.

General Maritime is a New York-based provider of international seaborne crude oil transportation services. The company filed for bankruptcy on Nov. 17, 2011. The Chapter 11 case number is 11-15285.

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