ASPL in asset management arrangement to cope with creditors

Singapore: Dry bulk owner Armada (Singapore) Pte Ltd (ASPL) has been granted leave to convene a creditors' meeting to vote on a proposed Scheme of Arrangement to protect its assets and maximise funds available to creditors as it restructures its business operations. Management at the company, which is reported to owe over $500m worth of claims to creditors, has attributed its current financial situation to a combination of factors such as defaults by third parties on charter hires, freights, and other contractual obligations owed to ASPL

Accordingly the company has revealed that it will not be able to fully meet its own near-term contractual obligations, making it necessary to seek temporary protection.

"We have achieved the best possible solution during this global economic crisis to guarantee our return to financial health," said Tommy Jensen Rathleff, Armada (Singapore) md. "We expect to create a viable and sensible plan that will provide a fundamentally sound groundwork for our business activities on a long-term basis."

"Equally important, the plan will identify concrete steps for maximising returns to ASPL's creditors," said Rathleff. "To be sure, justifying the confidence of our creditors is top priority for ASPL as we identify and implement solutions to the challenges that now face our industry."

A Scheme of Arrangement under Section 210, which is the method being used by ASPL, is markedly different from the dissolution proceedings initiated by several other dry bulk operators in recent weeks. Instead of simply liquidating, a Section 210 restructuring provides the company with the time needed to stabilise its liquidity position, strengthen its balance sheet, and recover third-party debts - while allowing the company to continue providing transportation services to its customers around the world.

"It's additionally important that, as a result of this restructuring, we will still be the captains of our own ship," said Rathleff. "There will be no outside overseers directing how we conduct our business and serve our clients."

ASPL is to immediately begin working with its creditors in accordance with the framework provided under Section 210 of the Singapore Companies Act and in accordance with Chapter 15 of the United States. [07/01/09]

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