Rickmers warns of insolvency if bondholders reject restructuring plan

“Should the noteholders not consent to the proposed resolutions, this would presumably result in the insolvency of Rickmers Holding,” the company said in a Q&A on its bond restructuring.

Should Rickmers be declared insolvent unsecured claims would be met only to the amount of the insolvency quota. Rickmers said that insolvency specialists Brinkmann & Partner the “best case” scenario for insolvency would see bondholders being paid less than the amount of the 8.875% interest payment due on June 11 that they would “certainly receive” if the proposed authorisation was given.

Last week Rickmers failed to hit the required quorum of bondholders with noteholders corresponding to only 17.37% of the outstanding bond capital voting. A quorum of 50% was required.

Rickmers has called a second meeting of the bondholders in form of a physical meeting on 1 June 2017.

The situation is reminiscent of that experienced by Singapore-listed shipping trust spin-off Rickmers Maritime which failed to get approval for its planned restructuring from bondholders and is now being wound-up.

Under the proposed restructuring, sole shareholder Bertram Rickmers is prepared to reduce his stake from 100% to 24.9% to allow key stakeholders to majority control the company.