Overseas Shipholding submits plan based on lender support agreement

By Caroline Salls

Pittsburgh, March 7 - Overseas Shipholding Group, Inc. filed a plan of reorganization and related disclosure statement Friday based on a plan support agreement reached last month with lenders holding a total of about 72% of amounts outstanding under its $1.5 billion credit agreement, according to filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the plan:

• Administrative claims, priority tax claims, other priority claims, secured vessel DIP claims, secured vessel claims, other secured claims and other unsecured claims will be paid in full;

• Overseas Shipholding will retain its Cexim vessels and DSF vessels and pay Cexim and DSF claims in full;

• Credit agreement claims will be satisfied through the distribution of stock and Jones Act warrants in the reorganized company and the right to participate in a $300 million rights offering, which will be supported by a subscription commitment from some holders of credit agreement claims;

• Holders of the company's 8¾% notes will be paid in full in cash, including any applicable contractual interest;

• The company's 8 1/8% notes and 7½% notes will be reinstated, including payment of any applicable contractual interest;

• The reorganized debtors will enter into exit financing consisting of a $735 million senior secured term loan facility and a $200 million revolving credit facility that, together, will give the company the funding necessary to both satisfy the plan's cash payment obligations and the expenses associated with closing the facilities, and finance the reorganized debtors' ongoing operations and capital needs following the emergence from Chapter 11;

• Admiralty lien claims and personal injury claims, including numerous asbestos claims, that have not otherwise been disallowed and expunged, will be unimpaired and may be asserted against the applicable reorganized debtors, subject to those debtors' rights and defenses;

• Holders of subordinated claims and old equity interests will receive a combination of reorganized Overseas Shipholding stock and Jones Act warrants with a value equal to $61.4 million;

• Intercompany claims are unimpaired and will be reinstated or discharged and satisfied at the option of the debtors or the reorganized debtors by contributions, distributions or otherwise; and

• Intercompany equity interests are unimpaired and will be reinstated.

Support, issuance conditions

To ensure that at least 75% of the equity interests in reorganized Overseas Shipholding will be owned by U.S. citizens in compliance with the Jones Act, the company said at least 77% of the shares of reorganized Overseas stock issued on the effective date will be issued to domestic holders.

Under the support agreement, the disclosure statement must be approved by May 16 and the plan must be confirmed by June 20.

The disclosure statement hearing is scheduled for April 11.

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

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