Marco Polo Seatrade, NordLB oil tanker financing settlement approved

By Lisa Kerner

Charlotte, N.C., Oct. 18 - Marco Polo Seatrade BV's settlement with the remaining shareholders and Norddeutsche Landesbank Girozentrale (NordLB) was approved by the U.S. Bankruptcy Court for the Southern District of New York on Tuesday, according to an attorney familiar with the case.

The settlement is related to a Dec. 10, 2007 loan agreement among NordLB as lender, Sudtank KGs as borrowers and the Southtank Cos. as co-debtors for the financing of the acquisition cost of four product oil tankers to be built by Zhejiang Hongguan Shipbuilding Co. Ltd. under shipbuilding contracts.

As previously reported, on Dec. 13, 2007 Marco Polo granted to NordLB a guarantee of up to $48.429 million in connection with the borrowings under the loan agreement.

Marco Polo and the remaining shareholders are required to provide an equity injection, totaling $35.2 million, of which $17.6 million would be owed by Marco Polo, according to court records.

The market values of the ordered ships fell dramatically since December 2007, decreasing the value of Marco Polo's limited partner interests in the Sudtank KGs and its shares in the Sudtank GmbHs.

In June 2011, NordLB said the loan to value ratio for the Sudtank Project was 104%.

According to court documents, the settlement agreement provides, among other things, that Marco Polo shall transfer the Sudtank equity interests to the remaining shareholders in consideration for NordLB releasing the company from the corporate guarantee and any other claims or causes of action against it arising out of the Sudtank Project.

Marco Polo's potential unsecured claims pool will be reduced by more than $48 million in exchange for the cost of surrendering the already "underwater" Sudtank equity interests.

Marco Polo Seatrade, an Amsterdam-based vessel owner, filed for bankruptcy on July 29. The Chapter 11 case number is 11-13634.

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