TOP Ships wants to restructure revolver repayment schedule, covenants

By Angela McDaniels

Tacoma, Wash., April 12 - TOP Ships Inc. reached a preliminary agreement to reduce the capital repayments on its revolving credit facility by $2 million in 2011 and by $2.8 million in 2012, according to a 20-F filing with the Securities and Exchange Commission.

Royal Bank of Scotland is the lender.

Under the current terms, the $26.9 million revolver is repayable in two installments of $580,000 starting in February 2011, nine installments of $940,000 and a balloon payment of $17.28 million payable in August 2013.

Under the agreement, the amounts reduced from the repayment schedule will be transferred to the final balloon payment.

Once the final documentation is executed, the company will also amend the minimum security and financial covenants to lower levels than the ones currently in place. TOP Ships said that if these levels had been in effect as of Dec. 31, it would not have been in breach of the security value maintenance, EBITDA and minimum liquid funds covenants.

In addition, it will pledge at least $5 million of TOP Ships shares to RBS as security.

The company is in discussions with the bank regarding these breaches and is finalizing a restructuring of the repayment schedule. It expects the restructuring to reduce quarterly installments to $250,000 and to transfer the shortfall to the balloon payment.

The interest rate on the revolver is Libor plus 250 basis points.

TOP Ships is a Maroussi, Greece-based provider of seaborne crude oil, petroleum products and drybulk transportation services.

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