Moby gains U.S. bankruptcy court recognition of Italian proceedings

By Sarah Lizee

Olympia, Wash., Feb. 28 – Moby SpA gained recognition of its Italian insolvency proceedings from the U.S. Bankruptcy Court for the Southern District of Florida, according to an order filed Friday.

As previously reported, foreign representative Achille Onorato said that despite the company’s success as an Italian ferry and cruise operator, in recent years its profitability decreased due to increased competition, expenses associated with Moby’s expansion in the Mediterranean and Baltic Seas, and increased costs, including for fuel and other port-related expenses.

In late 2019, Moby became the target of an involuntary bankruptcy proceeding in Italy. However, the Italian bankruptcy court dismissed the involuntary proceeding because Moby, despite its financial difficulties, was a solvent company.

In early 2020, the company’s financial situation deteriorated due to the Covid-19 pandemic. Between late 2019 and the first half of 2020, the company negotiated a potential debt restructuring with some creditors, including those that had filed the involuntary bankruptcy petition in Italy.

“Despite the progress of creditor discussions, certain creditors continued to threaten Moby Group’s business continuity,” Onorato said in court documents.

On June 30, 2020, the company and its main subsidiary, Compagnia Italiana di Navigazione SpA, filed two separate applications for judicial restructuring. From July 1, 2020, and onwards, any acts by creditors to start or continue enforcement and foreclosure proceedings over the companies’ assets have been automatically stayed. The stay will remain in force as long as the insolvency proceedings are pending.

The Italian bankruptcy court accepted the debtors’ applications on July 9, 2020, authorizing them to potentially reach an agreement with their creditors under the Italian bankruptcy court’s supervision.

On March 29, 2021, Moby filed its proposal for an agreement with creditors with the Italian court, and its subsidiary did so on May 24, 2021.

On June 24, 2021, the Italian court authorized Moby to proceed to the next stages of judicial restructuring.

“In order to allow for an expeditious and effective commercial restructuring in the Italian insolvency proceeding, including enforcing all rights and obligations under the indenture and other agreements, Moby now seeks the protections afforded by Chapter 15,” Onorato said.

The company’s capital structure includes €300 million of 7¾% bonds due February 2023 and credit facility debt due 2021, consisting of a €200 million term loan from UniCredit SpA, J.P. Morgan Securities plc, Goldman Sachs International, Banca IMI SpA, Banca Popolare di Milano, Monte dei Paschi di Siena SpA, Unione di Banche Italiane SpA and Banco Popolare Societa Cooperativa, and a €60 million revolving credit facility from UniCredit, Banca IMI, BPM, Monte Dei Paschi UBI, Banco Populare, JPMorgan and Goldman Sachs.

Moby is a Milan-based provider of maritime transportation services. The company made its Chapter 15 filing on Jan. 14 under case number 22-10311.

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