RICKMERS Maritime has come up with a revised restructuring plan for its S$100 million 8.45 per cent notes due 2017, following feedback after its informal meeting with the noteholders a week ago.
This includes a partial redemption of S$60 million of the principal in exchange for 60 per cent of the enlarged units of the trust, which will reduce the outstanding principal amount under the notes to an aggregate of S$40 million repayable in November 2023.
It has also proposed to issue 1.32 billion new units representing 150 per cent of the current number of units outstanding of the trust, said its trustee-manager Rickmers Trust Management (RTM).
One of the key suggestions raised at the meeting was for a more substantial debt-to-equity swap, said RTM chief executive Soeren Andersen.
"We can't be sure that unitholders will approve the dilution, but we will try. In the essence of time, we will run both processes to seek unitholders' and noteholders' consents in parallel," he said, adding that the proposal is "equitable".
RTM intends to seek noteholders' approval via a consent solicitation exercise to amend the notes.
If accepted, it would make way for a new facility of about US$260.2 million and extends the maturities of a large part of the trust's secured bank debts to the first quarter of 2021.
"This would give the trust more time to weather the depressed market, and underpins its solvency," he added.
Rickmers Maritime's sponsor Rickmers Holding AG, which holds 34.2 per cent of the trust units, has indicated an undertaking to vote in favour of the resolution to issue the new units as partial redemption for the notes.
"We urge all unitholders and noteholders to very carefully consider the proposals. If not executed within a short period of time, industry conditions and the trust's liquidity position may preclude a consensual solution by all of us," said RTM chief financial officer Tomas Norton de Matos.
"On the other hand, a successful restructuring would result in the provision of the new facility to Rickmers Maritime, providing the trust with a longer runway to survive the industry downturn and turnaround the business," he added.