Rickmers Maritime Trust to Be Wound Up

Rickmers Maritime Rickmers Trust Management, the trustee-manager of Rickmers Maritime, said its business would be wound up, as its efforts to reach an agreement with lenders to restructure existing loans fell through. The trust was given until April 15th by the HSH Syndicate, comprising HSH Nordbank and DBS Bank, to come up with a new restructuring plan which would ensure a higher level of total recoveries than under a winding up of the trust. The talks included industry, private and distressed investors and were aimed at raising new equity, on the basis that HSH would be willing to grant material debt forgiveness of the existing loans that it has extended to the trust if the trust secures similar debt forgiveness from the noteholders and its other unsecured creditors. However, there was no consensus among creditors and potential investors as they denied support to injections of the new capital amid challenges in obtaining noteholders’ and other creditors’ consent for the debt write-offs. 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. The winding up decision is made in light of no other possible alternatives to restructure the liabilities of the Trust with the objective of delivering value on an accelerated basis to all creditors to avoid uncertainties and risks involved in a protracted winding up process, the trust said. The trust said that it was is in advanced discussions with a potential buyer for its assets which may allow it to distribute cash recoveries upfront to unsecured creditors. However, no deal has been finalized at this stage. As disclosed, it is expected that the business operations of the trust’s vessels will remain unaffected by this process and that the trust will continue to meet its ongoing charter party obligations to its customers. The trust will also be submitting an application to the Singapore Exchange Securities Trading Limited (“SGX-ST”) for the delisting. Following the unsuccessful attempt in December 2016 to obtain noteholders’ approval to restructure the S$100 million 8.45% medium-term notes issued by the trust, which was a condition for the restructuring of its secured bank loans via a USD260 million new facility agreed to by its senior lenders, the Trustee-Manager has been unable to reach an alternative agreement with its lenders to restructure the Trust’s debts. This has led to the failure to repay the USD 196.7 million to the HSH Syndicate due on 31 March 2017 and the SD4.3 million coupon payment to noteholders in November 2016, as well as various breaches in loan covenants.