“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.

Written by: carisk | Categories: Freshly Minted, The Week in Review | April 9th, 2009 | Add a Comment

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