Rickmers senior lender "willing to consider material debt forgiveness"

HSH Nordbank AG, the largest senior lender to suspended Singapore Exchange (SGX) stock Rickmers Maritime Trust, said on Monday morning that it is willing to consider a "material debt forgiveness" of existing loans that it has extended to the shipping trust.

But this is provided that the trust can secure similar, substantial debt forgiveness from its noteholders and its other unsecured creditors, and raise additional equity.

This is also provided that the bank's recovery amount would be higher than its recovery from an immediate winding-up of the trust, and that recovery of its debt will not be prejudiced by the claims of other creditors of the trust.

In all other cases, HSH Nordbank said that it would support an orderly winding-up of the trust.

The above was revealed in an update on Monday morning by Rickmers Trust Management, the trustee-manager. It said that it is currently in discussions with advisers to formulate a new framework for restructuring the liabilities of the trust.

It intends to present the proposal to its creditors and noteholders when it has been finalised.

As at end-2016, Rickmers has outstanding bank debt of US$270.8 million, as well as outstanding debt of S$100 million in medium term notes maturing in May 2017.

Rickmers noteholders have previously rejected restructuring proposals such as a swap into perpetual convertible securities, or an equity swap.

Given how no further discussions between its senior lender and its financial adviser on note restructuring are ongoing, the restructuring is likely to be further delayed, the trustee-manager said on Monday.