“I Will Survive”

After what must have been extremely difficult negotiations, Excel Maritime Carriers (“Excel”) cast more light on its previously announced restructuring in this week’s earnings announcement. Last week, the company announced that it had amended its Nordea Syndicated Facility and the Credit Suisse Bilateral Facility as well as secured the necessary covenant waivers for these facilities that are valid through January 2011. The amendments are highlighted in the two charts contained herein. The first shows the adjustments to the covenants as well as the increased margin. The second slide relates specifically to the Nordea loan and the agreed amended amortization, which discussion, we would surmise, must have been extremely contentious both between the parties and within the syndicate. Nonetheless, it was agreed that the company would defer principal repayments of $150.5 million (originally scheduled for 2009-2010) to the balloon payment at maturity (April 2016). The agreed debt deferral will allow the company to meet its $97 million newbuilding obligation in 2010 and more importantly brought its breakeven rates to hopefully sustainable levels The company also has the option to defer against the balloon payment further principal payments, on a dollar for dollar basis, equal to the equity contributed by the major shareholders during 2009 and 2010.

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No Surprise Here Either

On Wednesday, the Excel sponsored SPAC, Oceanaut, announced that it would begin the process of dissolution as management has determined that it is unlikely that the company will consummate a business combination by the March 6th deadline specified in its charter.

Prior to the IPO, Excel had purchased in a private placement two million insider warrants at a price of $1 per warrant as well as 1.125 million insider units at a price of $8 per unit for a total consideration of $11 million.

Oceanaut estimates the liquidation price per share to be $8.27. No payments will be made with respect to outstanding warrants or to any of the company’s initial shareholders with respect to any shares owned by them prior to the IPO except for 625,000 shares of common stock included in the 1.125 million units purchased by Excel. As a result Excel expects to write-off $6 million of its investment.

Restis Returns

Having flirted with the US equity markets with withdrawn IPO Golden Energy and later with a potential deal with Excel-spon­sored SPAC Oceanaut, the Restis family is once again looking at ways to bring public equity into its shipping business. This time it is through the acquisition of six dry bulk carriers by SPAC Seanergy Maritime for an initial $395 million. There is also a potential earn- out worth $43 million if certain EBITDA hurdles are met. The ini­tial consideration comprises $367 million in cash and $28 million in the form of a 2-year promissory note. The vessels have an average age of 10.5 years and comprise two handysize carriers, two supramax vessels, and two panamax vessels. Maxim Group acted as financial advisor to Seanergy on the deal, while Loeb & Loeb, Vgenopoulos and Partners and Broad and Cassel all provided legal advice. We look forward to further exploring this very interesting transaction as it continues to develop.

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