Posted on April 20, 2017
By Simin Ngai, Fairplay
Singapore-listed Rickmers Maritime has announced it is to wind up, after failing to reach an agreement with lenders. It is therefore cancelling its annual meeting previously due to be held on 26 April.
The cash-strapped trust had failed to secure USD260 million funding from its lenders, HSH Nordbank AG and DBS Bank. This was contingent upon successful restructuring of a SGD100 million (USD71 million), 8.45% coupon bond maturing on 15 May 2017.
In December 2016 the trust’s noteholders voted against the debt-for-equity swap put forward in September 2016 that offered 60% of enlarged shares in place of SGD60 million of the principal, while delaying repayment of the balance SGD40 million to November 2023.
Earlier Rickmers Maritime had defaulted on a SGD4.3 million coupon payment due in November 2016.
The decision to wind up was also compounded by the trust defaulting on a USD196.7 million principal repayment to the HSH syndicate, due on 31 March 2017.
In the weeks before, Rickmers Maritime had been in discussions with HSH Nordbank, its main creditor, to restructure its loans to avoid winding up. On 21 March the trust said it was given until 15 April to present a restructuring plan to HSH Nordbank. At that point in time it also clarified that the HSH Nordbank did not agree to a discount on its debts.
In the latest announcement, Rickmers Maritime reiterated that HSH Nordbank was “willing to grant material debt forgiveness … if the trust was able to secure similar substantial debt forgiveness from the noteholders and its other unsecured creditors”.
Rickmers Maritime said that it failed to obtain debt write-offs from existing lenders and noteholders while unable to raise new equity.
“In light of the aggravated illiquidity and lack of new investors, the trustee-manager opines that it is impracticable to continue the trust and that it shall therefore be wound up.”
Earlier on 31 October 2016, Rickmers Maritime had secured unitholders’ approval to wind up should restructuring fail.
According to its 2016 annual report, released on 7 April, the trust was USD180.1 million year in debt in the year ended 31 December 2016, and faced a USD675.1 million working capital deficit. In February its independent auditor, PricewaterhouseCoopers, cast doubts on the use of the going concern assumption, in light of its defaults.
Rickmers Maritime expects the winding up process to be executed “in an orderly manner”, without any impact on its vessels’ ability to meet ongoing charterparty obligations to customers. It will also apply to delist from the Singapore Exchange.
The trust is also in “advanced discussions” with a potential buyer for its assets, in order to recover cash for unsecured creditors. So far it has sold two Panamax container ships – the 4,250 teu, 2009-built India Rickmers in December 2016 to repay loans from Commerzbank AG, and the 5,060-teu, 2004-built Kaethe C Rickmers in January for HSH Nordbank facilities.
The trust has yet to liquidate any assets but hopes to deliver “value on an accelerated basis to all creditors to avoid uncertainties and risks involved in a protracted winding up process” and will advise unsecured creditors the amount of recoveries “in due course”.
“Regrettably, unitholders are highly unlikely to recover any of their investments.”
Source: Fairplay
