Rickmers Trust Management, the trustee-manager of Singapore-listed Rickmers Maritime, has called an extraordinary general meeting where noteholders will vote on a revised proposal for the restructuring of the company’s debt. A second resolution to propose the winding up of the trust if the note restructuring deal isn’t approved is also being put forward.
The revised plan being put to shareholders includes the issue 1.32bn new units as partial redemption of the S$100m 8.45% notes due in 2017.
Soeren Andersen, chief executive officer of Rickmers Trust Management, commented: “We understand that noteholders and unitholders are disappointed in this very difficult situation faced by Rickmers Maritime. It is our duty to try to create a future for the business and provide a platform to improve their returns. Despite continued attempts to improve the terms to noteholders e.g. through intense engagements with our senior lenders, the terms have to remain largely as presented on 22 September 2016. While it will significantly dilute unitholders, it also holds the best chance of achieving a successful restructuring which preserves value for them.”
Rickmers is also putting up a resolution to wind up the trust if the restructuring isn’t approved, where the trust will self-liquidate while preserving the most value for all stakeholders.
“Liquidation is the most value-destroying option where all stakeholders may recover the least amount or nothing at all. This is particularly true for noteholders, who are unsecured creditors, and the trust’s owners, the unitholders,” Andersen added.
Rickmers also said that a special coupon payment of S$500,000 ($364.2k) would be made payable to noteholders in the event of a successful restructuring.
Bertram R. C. Rickmers, chairman of of Rickmers Trust Management, commented, “The board of directors has considered the terms, rationale, and benefits of the proposed issue and the proposed winding up. We are of the view that they are in the best interests of Rickmers Maritime and accordingly recommend that unitholders vote in favour of the resolutions. The board would like to assure unitholders that the trustee-manager is, in its best efforts, working to preserve value for all stakeholders.”
Rickmers Holding, the sponsor of the trust and 34.2% stakeholder, has undertaken to vote in favour of the plan.
If approved, the restructuring would enable Rickmers Maritime to close a new secured amortising term loan facility of $260.2m from a HSH syndicate to refinance most of the trust’s outstanding debt. The new facility would extend the maturities of a large part of the trust’s secured bank debts to the first quarter of 2021, and include a moratorium on principal repayments under the existing facilities to the fourth quarter of 2016.
Rickmers said the restructuring would improve the trust’s cash position by optimising fleet efficiency and reducing operating costs, while also seeking opportunities to pursue cash-producing opportunities including vessel acquisitions and the conversion of existing or acquired vessels for other purposes.
Even if the unitholders pass, but the noteholders do not pass.