Bankruptcy looms for Havila as bondholders cut support and banks call in loans

OSV owner Havila Shipping announced that it has failed to win support from its bondholders for a proposed restructuring, but the company has until next Monday to garner the required support to avert a potential bankruptcy.

Following a bondholders’ meeting on Wednesday, Havila received a notice from its secured bank lenders collectively that they intend to accelerate the relevant facilities under the facilities agreement defaulted by Havila, and proceed with formal acceleration notices imminently.

The bank lenders had agreed to a debt standstill in February this year after insufficient support was received from bondholders for Havila’s restructuring proposals.

Loss-making Havila embarked on a financial restructuring in January this year, seeking to reduce amortisation, postpone maturities of debts and covenents, and preserve liquidity, among others.

“The company's board of directors has concluded that the restructuring proposal as set out in the stock exchange notice dated 9 November 2016 is the only viable alternative to a bankruptcy,” Havila said.

“The board of directors has set a deadline by 15:00 CET on Monday 28 November 2016 at the latest to obtain the required support from all stakeholders,” it said.

In the restructuring proposal, Havila admited that its financial position has been and remains highly challenging, and support from its creditors is crucial for the company to tide through the current market downturn.

Posted 25 November 2016

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