Aligning our capital structure with the realities of today’s markets and economy – Genmar’s Plan

General Maritime Corporation announced today that it has reached agreements with its key senior lenders , including its bank group, led by Nordea Bank Finland plc, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a financial restructuring that will strengthen the Company’s balance sheet and enhance its financial flexibility.

Under the terms of the restructuring agreement, Oaktree will provide a $175 million of new equity, of which $75 million would be used to pay down the senior secured facilities, and convert its pre-petition secured debt to equity.  The Senior Lenders’  would agree to amend their credit facilities to provide an amortization “holiday” until June 2014, deferring cash payments of approximately $140 million for approximately two and a half years.

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Back to the Future – Genco’s New Credit Facility

On Monday, Genco Shipping & Trading announced it had received a bank commitment for a new $320 million senior secured amortizing term loan facility. Underwritten by Nordea Bank Finland Plc, Bayerische Hypo- und Vereinsbank AG, Sumitomo Mitsui Banking Corporation and DnB NOR Bank ASA, the five year facility is subject to definitive documentation.

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Defensive Acquisition with Upside

On Tuesday, just a week after Quintana‘s press release announcing the termination of the sale process, Excel and Quintana jointly announced that Excel had, over the weekend, agreed to acquire Quintana pursuant to a definitive merger agreement whereby Quintana would become a wholly owned subsidiary of Excel. The purchase price will be approximately $2.2 billion (based upon Excel’s closing price of $33.00), including net debt of Quintana and other costs.

Under the terms of the agreement, Quintana shareholders will receive a combination of cash and stock. Each Quintana share will receive $13.00 in cash and 0.4084 shares of Class A common stock in Excel. Based upon Monday’s closing price, the offer represents a total value of $26.48 per share, representing a 57% premium to Quintana’s closing price on that day of $16.89 and a 34% premium to Quintana’s 30-day average price. The agreement provides for a cap of $31.38 based upon an Excel share price of $45.00 as well as price adjustments for dividend payments. Continue Reading