Omega Navigation seeks approval of bid procedures for equity interests

By Jim Witters

Wilmington, Del., Jan. 14 - Omega Navigation Enterprises Inc. is seeking court approval of bid procedures to facilitate the sale of its equity interests, according to documents filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

The sale comes after the court rejected Omega's plan to transfer its equity interests in its subsidiaries to One Investments Inc. and debtors' chief executive officer George Kassiotis, an affiliate of One Investments.

As previously reported, Omega obtained court approval to turn its vessels over to the senior lenders in exchange for certain consideration.

The company withdrew its joint plan of reorganization and related disclosure statement in December.

Equity sale

The equity interests for sale include:

• Omnicrom Holdings Ltd., a Marshall Islands company that is a joint venture in two non-debtor joint venture holding companies - Stone Shipping Ltd. and Onest Shipping Ltd. The other partner is Topley Corp.

Stone wholly owns Blizzard Navigation Inc. Onest wholly owns Tornado Navigation Inc.

Blizzard is the owner of the vessel Omega Duke. Tornado is the owner of the vessel Alpine Marina;

• Omega Investments Ltd., a Marshall Islands company and a wholly owned subsidiary of Omega, is an 80% owner of OD Investment Ltd.

Delos Shipping Ltd., with its affiliate Delos Megacore, LLC, a non-affiliated non-debtor third party, owns the remaining 20% interest in OD.

OD owns three subsidiaries - Fire Navigation Inc., Hurricane Navigation Inc. and Rain Navigation Inc.

Fire owns the Megacore Honami. Hurricane owns the Megacore Philomena. Rain owns the Megacore Panthea; and

• Omega Management, Inc., a Marshall Islands company and a wholly owned subsidiary of Omega, is the commercial and technical manager for all eight of Omega's vessels.

Interest in the equity

The only entity other than Kassiotis to express an interest in acquiring equity interests has been Delos, which proposed to acquire the equity interests in Omega Investments and Omnicrom, but not in Omega Management, court documents state.

The Delos proposal offered aggregate consideration to the debtors consisting of an amount sufficient to repay the One Investments note in full plus $2 million.

The Delos proposal was contingent on some creditors waiving their $80 million in guarantee claims against Omega Navigation, consenting to the transfer of control to Delos and restructuring their obligations with the subsidiaries.

Omega said it believes that "the existence of the Delos proposal was presumably one of the factors the court considered in denying" the motion to sell the equity to One Investments and Kassiotis.

Proposed bidding procedures

The proposed bidding procedures provide:

• Bidders may bid on one or two of the equity interests but the company prefers bids on all three entities;

• A bidding deadline of 4 p.m. ET on Feb. 4;

• An auction at 10 a.m. ET on Feb. 8;

• The highest and best qualifying bid will serve as the opening bid;

• Qualifying bidders may make credit bids;

• A sale hearing at 2 p.m. ET on Feb. 11; and

• Closing of the sale must occur within 10 calendar days of the entry of the sale order.

A hearing on the proposed bidding procedures is scheduled for 2 p.m. ET on Jan. 23.

Omega Navigation is an Athens, Greece-based provider of marine transportation services. The company filed for bankruptcy on July 8, 2011 under Chapter 11 case number 11-35926.

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