Rickmers Trust Management, the trustee-manager of the container ship owner and operator Rickmers Maritime, has presented a revised restructuring plan in relation to the SGD 100 million (USD 74 million) 8.45% notes due 2017 after taking feedback from its informal meeting with noteholders on 15 September 2016.
Soeren Andersen, the Chief Executive Officer of Rickmers Trust Management, said that one of the key suggestions raised at the informal meeting was for a more substantial debt to equity swap, which requires unitholders’ approval at an extraordinary general meeting.
”We can’t be sure that unitholders will approve the dilution, but we will try. In the essence of time, we will run both processes to seek unitholders’ and noteholders’ consents in parallel,” Andersen said.
Rickmers Trust Management intends to seek the approval of noteholders via a consent solicitation exercise to amend the notes, with a partial redemption of SGD 60 million of the principal in exchange for 60% of the enlarged units of the trust, such that the outstanding principal amount under the notes is reduced to an aggregate of SGD 40 million repayable in November 2023.
It is also proposed that some 1.32 billion new units are to be issued, representing 150% of the current number of units outstanding of the trust.
“The proposal that we are presenting is equitable. If accepted, it would make way for a new facility of about US$260.2 million, and extends the maturities of a large part of the Trust’s secured bank debts to the first quarter of 2021 and includes, amongst other terms, a generally back-ended amortisation schedule. This would give the Trust more time to weather the depressed market, and underpins its solvency,” said Andersen.
In support of the proposed restructuring, Rickmers Holding AG, the sponsor of Rickmers Maritime holding 34.2% of the units in the trust, has indicated that they will be providing an undertaking to the trustee-manager to vote in favour of the resolution to issue 1.32 billion new units as a partial redemption of the notes.
Tomas Norton de Matos, Chief Financial Officer of RTM, said: “We urge all unitholders and noteholders to very carefully consider the proposals. If not executed within a short period of time, industry conditions and the Trust’s liquidity position may preclude a consensual solution by all of us. On the other hand, a successful restructuring would result in the provision of the New Facility to Rickmers Maritime, providing the Trust with a longer runway to survive the industry downturn and turnaround the business.”
Rickmers Maritime recorded a net loss of USD 55.6 million in the second quarter of this year, compared to a loss of USD 15.7 million in the same period last year, a change of 255%.
The company’s charter revenue during the period fell to USD 18 million from USD 28.5 million seen in the second quarter of 2015, mostly due to reduced charter rates and a lower vessel utilization rate amid a worsened charter market.