Sea Containers emerges from bankruptcy

By Caroline Salls

Pittsburgh, Feb. 11 - Sea Containers Ltd. emerged from Chapter 11 bankruptcy after its plan of reorganization took effect on Wednesday, according to an 8-K filed with the Securities and Exchange Commission.

As previously reported, the plan was confirmed on Nov. 24.

The plan calls for the liquidation or dissolution of the operations of the Sea Containers debtors and various non-debtor subsidiaries. Holders of existing common shares will not receive any plan distribution.

Under the plan, the Sea Containers debtors will transfer their direct and indirect interests in their marine and land container leasing business to a new company.

In return, reorganized Sea Containers will receive the equity in the new company for distribution to plan creditors.

The new company will also lend cash to reorganized Sea Containers and will receive a repatriation note from the reorganized company.

The plan also establishes a non-debtor subsidiary reserve, to be funded by cash and new equity, which will be used to make payments to creditors of the non-debtor subsidiaries.

Treatment of creditors will include:

• Holders of other secured claims will recover 100% either in cash or through a full return of the collateral securing the claim;

• Holders of other priority claims will recover 100% in cash;

• Holders of other unsecured claims and pension schemes claims will recover 47% to 61% through an unsecured claim distribution;

• Sea Containers Caribbean Inc. interests will be reinstated; and

• Holders of Sea Containers Ltd. common stock interests will receive no distribution under the plan.

Exit financing

As previously reported, on Nov. 6 Sea Containers also received court approval of a $150 million exit financing commitment from Fortis Bank (Nederland) NV.

Proceeds of the facility will be used to repay the company's debtor-in-possession financing, for working capital and for corporate purposes and to fund the costs incurred in connection with the liquidation of Sea Containers and its subsidiaries.

The exit term loan will mature in five years from the effective date of Sea Containers' plan of reorganization.

Interest from the funding date to the six-month anniversary of the funding date will be Libor plus 640 basis points.

After that, the interest will be based on the effective advanced rate. If the rate is greater than 50%, interest after six months will be Libor plus 615 bps; if the rate is equal to or less than 50% but greater than or equal to 40%, interest will be Libor plus 365 bps; and if the rate is less than 40%, interest after six months will be Libor plus 265 bps.

According to the 8-K, the schemes of arrangement proposed by U.K. subsidiaries 0438490 Travel Ltd., 1882420 Ltd., SC Maritime Ltd., Sea Containers Services Ltd. and Yorkshire Marine Containers Ltd. also took effect Feb. 11.

Sea Containers, a Hamilton, Bermuda-based provider of passenger and freight transport and marine container leasing, filed for bankruptcy on Oct. 15, 2006 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 06-11156.

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