The previous proposal that would have seen bondholders taking a 60% haircut on the SGD100m ($73.7m) issue due in May 2017 met with resistance when presented to an informal meeting of bondholders last week. Under the new proposal there would a partial redemption of SGD60m of the issue by way of an equity swap for 60% of units in the enlarged trust. The trust would issue 1.32bn new units representing 150% of the current outstanding units of the trust.
The maturity date of the remaining SGD40m in bonds will be moved to November 2023.
“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,” said Soeren Andersen ceo of Rickmers Trust Management.
“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.”
The issue price of the new units will be SGD00.45474 a 12.4% to the weighted average on 21 September.
If the new proposal is not approved Rickmers Maritime will not receive a new $260.2m debt facility and says it would no longer able to operate on a going concern basis. In such a scenario the manager might propose winding-up the trust.
Tomas Norton de Matos, cfo of Rickmers Trust Management, warned, “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.”
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