NewLead Sheds Assets

Less fortunate was NewLead Holdings Ltd with its mixed fleet of tankers and dry bulkers. While a sound strategy, its levered balance sheet and lack of liquidity could not withstand the abysmal tanker market. With limited options, the company and the bank syndicate led by the Bank of Scotland agreed to sell its four LR1 product tankers with the banks agreeing to accept the net sales proceeds in full satisfaction of all amounts owed under the loan agreement. The sale of two of the vessels occurred on December 22^nd with the sale of the other two expected to take place this month. As a result, NewLead’s indebtedness will be reduced by $147.9 million to $437.5 million, which will encumber a remaining fleet of 14 dry bulk vessels, including one handysize under construction and two handymax product tankers. This was a huge step in a process that continues.

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | January 5th, 2012 | Add a Comment

Bigger is Better

NewLead Holdings Ltd. last week filed a shelf registration to issue up to $500 million of common shares, preference shares, warrants and debt securities. Proceeds from the offering are intended to be used for general corporate purposes, including general working capital and possible future acquisitions.

The company currently has approximately 79.5 million shares outstanding of which about 18.9 million (23.8%) are held by non-affiliates. The market capitalization of the company is approximately $62 million as of Monday with shares closing at $0.78.
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Written by: carisk | Categories: Freshly Minted, The Week in Review | April 8th, 2010 | Add a Comment

Global Ship Lease Continues to Struggle With LTV

Global Ship Lease (“GSL”) remains in default of the loan to value covenant in its $800 million credit facility with Fortis, Citi, HSH Nordbank, SMBC, KfW, DnB Nor and Bank of Scotland. As of December 31st, there was $542.1 million outstanding under the facility.

Among the many restrictive covenants, the company has breached and sought waivers from the banks for the LTV test, which provides for a maximum leverage of 75%.

Directly impacted by the economic recession, demand for liner services and therefore containerships collapsed last year. Consequently, there has been a dramatic decline in values and de minimis sale and purchase activity. With little activity and therefore no comps, there is hesitancy on the part of brokers to value assets. Hence the value of GSL’s fleet is a question mark. If, in fact the leverage test is exceeded, the company must either provide additional collateral or prepay the loan to cure the default.

Written by: carisk | Categories: Freshly Minted, The Week in Review | July 2nd, 2009 | Add a Comment

Genco Does the Deed

On Monday, Genco Shipping & Trading announced that it had amended its ten-year $1.4 billion credit facility led by DnB NOR and Bank of Scotland. Under the terms of the agreement, the collateral maintenance requirement will be waived until such time that Genco is in a position to satisfy the covenant and is in compliance with all of its financial covenants. Genco will continue to be able to borrow the undrawn portion of the facility during the waiver period and expects to use this capacity to partially fund the three remaining Capesize vessels, which are expected to be delivered this year, with the balance coming from internally generated cash flow.

The quid pro quo for the concession involves increased pricing and, not unsurprisingly, accelerated repayment. Amounts borrowed under the amended credit facility begin to reduce on March 31, 2009 at $12.5 million per quarter, which will increase to 3.5% of the amount outstanding for each quarter after March 31, 2012 until repaid in full at maturity. The loan will bear interest LIBOR + 2%, an increased spread of 1.2%. There is also an increase in the commitment commission payable to each lender from 0.20% to 0.70% per annum of the daily average unutilized commitment of such lender.

In addition to the increased pricing, Genco has agreed to suspend dividends and its stock buyback program immediately. Both can be reinstated once Genco can represent that it is in a position to again satisfy the collateral maintenance agreement and is able to meet the criteria outlined in the credit facility to engage in these two activities. There are no further restrictions on cash.

It is all about preserving cash.

Written by: carisk | Categories: Freshly Minted, The Week in Review | January 29th, 2009 | Add a Comment

Surveying the Credit Markets

Marine Money has concluded the collection of data for its 2008 shipping banker survey and would like to sincerely thank all who have participated. We are currently concluding work on our annual shipping portfolio league table and would like to thank the following banks for their cooperation and contribution to the development of a transparent and well-informed ship finance industry: Bank of Ireland, Bank of Scotland, Bremer Landesbank, Calyon, Commerzbank, Danish Ship Finance, Danske Bank, Deutsche Bank, Deutsche Schiffsbank, DnB NOR, Dresdner Bank, DVB, Helaba, HSH Nordbank, HVB, JP Morgan, KfW, Lloyds TSB, Natixis, Nordea and RBS. If you don’t see your bank’s name on the list, think it belongs there, and haven’t been in touch with us this weekend, please send an email to nhuvane@marinemoney.com ASAP to ensure you are included. Both survey and portfolio data will be released in the upcoming May issue of Marine Money.

Written by: carisk | Categories: Freshly Minted, The Week in Review | May 8th, 2008 | Add a Comment

Eastwind & Marine Capital Pick Up Georgia’s OSCo Fleet

The Eastwind Group of New York and Marine Capital of London announced today that they have reached agreement with the Ministry of Economic Development of Georgia for their acquisition of Ocean Shipping Company, following a recently-concluded competitive bidding process. OSCo, the Georgian state shipping company, owns a fleet of 15 product tankers ranging in size from 16,000 to 35,000 DWT and in year of build from 1981 to 2004. The ships have been trading primarily in the Atlantic Ocean and the Baltic and Mediterranean Seas.

Eastwind is an owner and operator of 70 vessels, including product tankers, dry bulk carriers and refrigerated ships. Marine Capital is a well-known shipping investment company and was the originator of the transaction.

“We have been working on this transaction for a few months and are very pleased to have secured the deal despite keen competition,” said Tony Foster, managing director of Marine Capital. “We are delighted to be in partnership with the Eastwind Group. I believe we were successful because of the strength of our investor group and the imaginative financing provided by Bank of Scotland. I want to emphasize that the Georgian government has dealt with us constructively and professionally throughout the process.”

“The OSCo fleet will greatly strengthen us in an attractive sector of the shipping market, where we expect continued growth and development for our company,” said Don Simmons, managing director of Eastwind. “Although the transaction represents an outright privatization by the Georgian government, we will retain strong links to the country through our acquisition of OSCo’s crewing operations. In addition to their continued manning of the OSCo fleet, we also expect to introduce Georgian seafarers on a number of our other vessels.”

It is understood that the new owners plan to retain Columbia Shipmanagement to operate the OSCo vessels.

Written by: carisk | Categories: Freshly Minted, Mergers & Acquisitions | March 31st, 2005 | Add a Comment

Jim be Nimble: Citibank, Fortis, Bank of Scotland To Sea Containers Rescue

By Matt McCleery

Jim Sherwood, president of marine container lessor, passenger and freight transport operator, and leisure industry investor Sea Containers (NYSE: SCRA), and his finance team headed up by Danny O’Sullivan have once again proven themselves to be nimble. SCRA signed a $160 million bridge loan from Citigroup just two weeks before the July 1, 2003 maturity of nearly $150 million in high yield bonds, and did it subject to selling Isle of Man Steam Packet, which closed July 15, 2003.

Although the company has a mountain of maturities coming in the next few years, SCRA has continued to meet obligations to lenders, lessors and bond holders even after a disastrous 2001 left the company’s balance sheet in a precarious position. There are loads of lessons to be learned here and we’ll go through them in this article.

One lesson is that when a company is as diversified as SCRA is, some area of the business is bound be going right (or wrong) at any given time and that area of the business can be used to raise cash when the need arises.

Written by: carisk | Categories: Marine Money | July 1st, 2003 | Add a Comment