Omega Navigation files bankruptcy, cites senior lender 'intransigence'

By Caroline Salls

Pittsburgh, July 8 - Omega Navigation Enterprises Inc. filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the Southern District of Texas "in light of the unwillingness of its senior lenders to work with Omega on an out-of-court restructuring of its senior loan agreement," according to a company news release.

The company said the bankruptcy filing will allow it to complete a restructuring designed to restore it to long-term financial health.

According to the release, Omega needs the protection of Chapter 11 to ensure the uninterrupted operation of its vessels and services to its customers.

"The company is disappointed in the senior lenders' intransigence and has commenced litigation against them in Greece," the release said.

The Chapter 11 filings include Omega Navigation Enterprises, Inc., Omega Navigation (USA) LLC, Galveston Navigation Inc. (the Omega Lady Miriam), Beaumont Navigation Inc. (the Omega Lady Sarah), Carrolton Navigation Inc. (the Omega Prince), Decatur Navigation Inc. (the Omega Princess), Elgin Navigation Inc. (the Omega Queen), Fulton Navigation Inc. (the Omega King), Orange Navigation Inc. (the Omega Emmanuel) and Baytown Navigation Inc. (the Omega Theodore).

The Chapter 11 filings do not include technical vessel manager Omega Management Inc. or Omega wholly-owned subsidiary Omnicrom Holdings Ltd., which indirectly owns a 50% interest in each of the vessels Omega Duke and Alpine Marina through two separate joint venture entities.

Omega Investments Inc., which owns 80% of OD Investment Inc., the owner of the vessels Megacore Honami, Megacore Philomena, Hull 2295 and Hull 2299, was also not part of the filing.

In addition, Omega said its Megacore Shipping Ltd. joint venture with Topley Corp. was terminated, effective July 1.

According to court documents, Omega Navigation had $527.43 million in total assets and $359.53 million of total debt at Dec. 31, 2009.

Omega's principal legal advisor for the restructuring process and Chapter 11 proceedings is Bracewell and Giuliani LLP. The Company's financial adviser is Jefferies & Company, Inc.

Omega Navigation is an Athens, Greece-based provider of marine transportation services and specializes in product tankers. The Chapter 11 case number is 11-35926.

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