RICKMERS Maritime said on Wednesday it has been offered a restructured secured amortising term loan facility of up to US$260.2 million to refinance all of the trust's present outstanding debt.
Rickmers said that the offer came from the senior lenders of the HSH syndicate, comprising HSH Nordbank AG (Singapore branch) and DBS.
"If successfully entered into, the new facility would extend the maturities of a large part of the trust's secured bank debts to the first quarter of 2021, and include a moratorium on principal repayments under the existing facilities to the fourth quarter of 2016."
The new facility is conditional upon, among others, a successful restructuring of the S$100 million, 8.45 per cent notes that are due in 2017.
Rickmers said: "The current adverse industry conditions have affected the financial performance of the trust in terms of lower revenues, cash and asset values, which consequently reduced the trust's debt capacity. This may prevent the trust from meeting its ongoing coupons and principal at maturity obligations under the notes."
The trust has recently appointed PricewaterhouseCoopers Advisory Services to assist in the restructuring of the notes.
It is contemplating a debt exchange with its existing noteholders that seeks to exchange the existing principal amount of the notes and interest due thereon, for new unsecured S$28 million fixed rate step-up perpetual convertible securities. These will be convertible at any time into units of the trust at a fixed conversion price, subject to adjustment for various events.
Rickmers said that based on the proposed fixed conversion price, the perpetual convertible securities will initially be convertible into 20 per cent new units of the trust (based on the existing issued outstanding units) and are expected to be valued at about S$40 million at issuance.
"The proposed debt exchange will align the interests of all stakeholders and allow them the benefit of any upside resulting from an improvement in the market environment and charter rates. It is also in line with the proposed refinancing of the trust's existing facilities to improve long-term solvency."
Rickmers added that it will be engaging noteholders in relation to the proposed debt exchange in a noteholders meeting on Sept 15.