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BLT to transfer 27 ships to creditors under further restructuring plan

BLT to transfer 27 ships to creditors under further restructuring plan
A further restructuring of Berlian Laju Tanker (BLT) will see the shipowner transfer 27 vessels to a newly formed company NewCo, owned by all the lenders under a mandated lead arranger (MLA) facility agreement.

The 27 vessels, comprising of 23 chemical tankers and four LPG carriers, are among a total of 39 ships that make up BLT’s current fleet strength, including eight time-chartered vessels.

The restructuring of BLT, which has been ongoing since 2012, has supposedly entered into this ‘final phase’ where the consortium of lenders, including private equity firms Kohlberg Kravis Roberts (KKR) and York Capital, will become 100% equity holders of BLT via this debt-for-equity deal.

The consortium of lenders hold no less than $584m of outstanding BLT debts.

Jack Noonan, ceo of BLT Chembulk Group, the chemical tanker arm of BLT, said the intention of the latest deal is that NewCo will eventually be rebranded to Chembulk. Noonan is expecting a “seamless transition to NewCo and uninterrupted operations throughout the process” and “business as usual”.

NewCo will be headquartered in Southport, Connecticut, with offices in Brazil, Denmark and Singapore. The start-up date is scheduled in the third quarter of this year.

Surya Parties, the controlling shareholder of Jakarta-based BLT, has consented to support the restructuring.

BLT will also reach an agreement with other creditors including the plan creditors (PKPU) to support the restructuring.

“The existing PKPU Plan is premised on certain market forecasts being met and substantial fundraising over the 10-year repayment period,” BLT said in a statement.

“However, due to delayed market recovery, and a lack of bank financing and investor appetite available for the industry, there is a need for a further restructuring of the company’s obligations under the existing PKPU Plan and MLA Facility Documents,” it continued.

BLT added that all proceeds received from the restructuring will be used for working capital or for the expansion of the company. The group expects to receive net consideration of around $675m.

In 2007, BLT spent $850m to acquire US-based chemical tanker firm formerly known as Chembulk Tankers, now named BLT Chembulk Group. The global economic crisis of 2008 hit the chemical tanker shipping market and severely impacted the business of BLT.