Rickmers Maritime Gets Breathing Space
Marine transport company Rickmers Maritime has been offered a credit facility worth USD 260 million in order to cover bank debt. The carrier is also considering converting its debt to bonds worth more than USD 70 million as part of an ongoing restructuring of the listed company's debt burden.
Rickmers Maritime received an offer from HSH Syndicate for a restructured secured amortising term loan facility of up to US$260.2 million, says a report in Singapore Business Review.
This is to refinance the company’s outstanding debt under existing facilities granted by its lenders.
Rickmers revealed that a successful entry into the new loan facility would extend the maturities of a large part of the company’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, among other terms and conditions.
Meanwhile, the shipping trust announced that its lenders had collectively agreed to extend the repayment of a US$260 million ($350 million) outstanding loan from March 2017 to 1Q2021.
The move will enable Rickmers to continue operating for another five years and buy time for it to improve its balance sheet.
However, it is subject to bondholders agreeing to restructure an existing 8.45% $100 million bond due 2017.
The Trustee-Manager is actively engaged with all of its bank lenders on the above comprehensive refinancing plan which, if achieved, will result in a unified credit facility, in line with the Trust’s balance sheet optimisation efforts to reduce amortisation, increase loan tenures and improve long-term solvency.
The refinancing plan, while containing certain restrictions, should allow the Trust an optimized debt structure and with sufficient time to manage its liabilities and growth in the present adverse industry conditions.
The current adverse industry conditions have affected the financial performance of the Trust in terms of lower revenues, cash and asset values, which consequently reduced the Trust’s debt capacity. This may prevent the Trust from meeting its on-going coupons and principal at maturity obligations under the Notes.
The Trust has recently appointed PricewaterhouseCoopers Advisory Services Pte. Ltd. to assist in the restructuring of the Notes in light of the present challenging industry conditions that limits the Trust’s access to debt and capital markets.
