Genco Shipping restructuring support agreement draws second appeal

By Kali Hays

New York, May 12 - Genco Shipping & Trading Ltd.'s official committee of equity holders is seeking an appeal of the company's approved entry into a restructuring support agreement, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Genco received court authorization of the agreement April 28.

The company entered into the agreement with some of its lenders under three secured facilities and some holders of the company's 5% convertible senior notes due Aug. 15.

Company stockholders managed by Aurelius Capital Management, LP are also seeking an appeal of the agreement.

The terms of the restructuring support agreement include the following:

• The 2007 facility lenders will convert all of their pre-bankruptcy senior secured debt into 81.1% of the equity of the reorganized company;

• All of the company's obligations under the $253 million and $100 million facilities will be replaced by new senior facilities with extended maturity dates through August 2019 and covenant modifications;

• Genco's obligations under the convertible senior notes will be converted into 8.4% of the equity of the reorganized company;

• All other general unsecured claims will be reinstated and paid in the ordinary course of business;

• All equity interests in the company will be canceled, with holders receiving seven-year warrants for 6% of the new Genco equity struck at a $1,295,000,000 equity valuation from the consideration that would otherwise be provided to the holders of 2007 facility claims and convertible note claims; and

• Genco will conduct a $100 million rights offering for 8.7% of the equity of the reorganized company. The 2007 facility lenders will have the right to participate in up to 80% of the rights offering, with their portion backstopped by some of the lenders, and eligible holders of convertible notes will have the right to participate in up to 20% of the rights offering, with their portion backstopped by some of the noteholders.

Genco, a New York-based transporter of iron ore, coal, grain, steel products and other drybulk cargoes, filed bankruptcy on April 21. The Chapter 11 case number is 14-11108.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.