Marco Polo Seatrade eyes settlement with NordLB over financed tankers

By Lisa Kerner

Charlotte, N.C., Sept. 28 - Marco Polo Seatrade BV, its debtors and debtors-in-possession asked the court to approve a settlement with the remaining shareholders and Norddeutsche Landesbank Girozentrale (NordLB), according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

A hearing is set for Oct. 18.

The settlement is related to a Dec. 10, 2007 loan agreement among NordLB as lender, and Südtank KGs, as borrowers, and the Southtank Cos., as co-debtors, for the financing of the acquisition cost of four product oil tankers to be built by Zhejiang Hongguan Shipbuilding Co. Ltd. under shipbuilding contracts.

On Dec. 13, 2007, Marco Polo granted to NordLB a guarantee of up to $48.429 million in connection with the borrowings under the loan agreement.

Marco Polo and the remaining shareholders are required to provide an equity injection, totaling $35.2 million, of which $17.6 million would be owed by Marco Polo, the filing said.

The market values of the ordered ships fell dramatically since December 2007, decreasing the value of Marco Polo's limited partner interests in the Südtank KGs and its shares in the Südtank GmbHs.

In June 2011, NordLB said the loan to value ratio for the Südtank Project was 104%.

The settlement agreement provides, among other things, that Marco Polo shall transfer the Südtank equity interests to the remaining shareholders in consideration for NordLB releasing the company from the corporate guarantee and any other claims or causes of action against it arising out of the Südtank Project.

As a result, Marco Polo's potential unsecured claims pool will be reduced by more than $48 million in exchange for the cost of surrendering the already "underwater" Südtank equity interests, according to the filing.

Marco Polo Seatrade, an Amsterdam-based vessel owner, filed for bankruptcy on July 29. The Chapter 11 case number is 11-13634.

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