Overseas Shipholding plan rights offering and debt financing increased

By Caroline Salls

Pittsburgh, Feb. 28 - Overseas Shipholding Group, Inc. and lenders holding 72% of the amounts outstanding under its $1.5 billion credit agreement entered into an amendment to a plan of reorganization support agreement, according to an 8-K filed Friday with the Securities and Exchange Commission.

Overseas said the amendment increases the amount to be raised through a rights offering to $300 million from $150 million to $300 million. The rights offering will be back-stopped by the consenting lenders, their designees or their assignees.

In addition, the company and lenders agreed to increase the amount of debt financing expected to be raised under the plan to $735 million from $625 million.

The company said the proceeds of the financing, together with the additional proceeds from the rights offering, will enable it to satisfy the claims of Danish Ship Finance A/S in full in cash.

As a result, the Overseas debtors will retain, for the benefit of their reorganized business, the 10 vessels over which Danish Ship Finance has security interests.

In addition, some of the Overseas debtors requested court approval to enter into vessel management agreements to outsource management services related to vessels in the company's international flag fleet.

According to the 8-K, the services being outsourced include technical management, some aspects of commercial management and crew management of vessels in the fleet that are subject to security interests held by the Export-Import Bank of China and the Danish Ship Finance vessels to V.Ships and to V Ships affiliate International Tanker Management.

The amended plan support agreement and the vessel management agreements remain subject to approval by the U.S. Bankruptcy Court for the District of Delaware.

Overseas Shipholding, a New York-based tanker company, filed for bankruptcy on Nov. 14, 2012. Its Chapter 11 case number is 12-20000.

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