Genco Shipping & Trading, operator of dry cargo ships, has obtained approval from the U.S. bankruptcy judge Sean Lane to proceed with its restructuring plan, writes Reuters.
The company filed voluntary Chapter 11 petitions in April, 2014 to implement a prepackaged financial restructuring that is expected to reduce its total debt by approximately $1.2 billion.
Seeking relief under Chapter 11 put Genco alongside other shippers that have recently fallen victims to sluggish market conditions and dip of international shipping rates brought about by overtonnage.
During the hearing held on Wednesday in Manhattan, the only to oppose the restructuring scheme were some of the company’s shareholders who claimed that the plan only aims to transfer control to creditors and management.
Their opposition was fueled by the judge’s decision not to give any recovery to the equity holders having in mind that they haven’t expressed interest in investing their “own money in a transaction involving the debtor,” Bloomberg cited judge Lane as saying.
The restructuring plan envisages giving secured lenders 81 percent of Genco’s reorganized equity.
The company’s obligations under the Convertible Senior Notes will be converted into 8.4% of the equity of the reorganized company.
World Maritime News Staff