Havila Shipping bondholders approve funding proposal for a senior secured callable bond

By Rebecca Melvin

Concord, N.H., Nov. 23 – The bond trustee of Havila Shipping ASA’s senior secured callable bond issue 2010/2016 (ISIN: NO0010590441) informed the company on Tuesday that at least half of the bondholders consented to a proposal to provide a one-year loan covering company operating expenses.

The bond trustee said the proposed resolution was adopted.

Under the proposal, the company will operate the vessel with bondholder funding, given the expectation that over the course of a year, the vessel’s net cash flow will be positive. The alternatives to approval of the proposal are to put the vessel in lay-up or to sell the vessel, according to the company.

A summons for written resolution was made by the company earlier Tuesday, seeking at least one-half majority of the total number of voting bonds to vote in favor of the proposal or a quorum representing at least 50% of the number of voting bonds to submit a response to the summons by 10 a.m. ET on Dec. 8.

The proposal was being made pursuant to the company’s 2020 amended bond indenture, which provides for the company to cover operating expenses for up to six months during its restructuring period if the vessel’s revenue doesn’t cover expenses. The company said Tuesday the six-month period ends this quarter.

According to the company, net cash flow vessel is estimated to be positive for the next 12 months and servicing the debt over a period of one year instead of quarterly is practical in the current situation.

That means the unpaid interest will be capitalized under tranche B and tranche A will be reduced with the vessel installments and an amount equal to the amount added to tranche B for the first three quarters, the company said.

Any positive cash flow will service the bond in line with the indenture amendment. If cash flow is negative, the amount will be carried forward to the next one-year budget period. In addition, if a firm contract sufficient to serve the tranche A debt becomes available, the company will enter the contract and start serving the debt on a quarterly basis.

In its summons for written resolution, the company informed the bond trustee that holders of more than two-thirds of the bond supported the proposal.

Questions about the proposal may be directed to the issuer via Havila Shipping’s chief financial officer, Arne Johan Dale (+47 909 87 706, ajd@havila.no). Alternatively, questions may be directed to Nordic Trustee AS, the bond trustee, via Lars Erik Laerum (+47 22 87 94 06, laerum@nordictrustee.com).

The ship operator is based in Fosnavag, Norway.

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