TBS International plan confirmed, 'non-material' changes OK'd by court

By Caroline Salls

Pittsburgh, March 29 - TBS International plc's pre-packaged plan of reorganization was confirmed and the company received court approval to make "non-material modifications" to the plan without needing to re-solicit creditor votes, according to Thursday filings with the U.S. Bankruptcy Court for the Southern District of New York.

TBS said the changes resolve minor technical and conforming issues raised by secured lenders AIG Commercial Equipment Finance, Inc. and Credit Suisse AG regarding their treatment under the original plan.

Plan changes

Specifically, under the plan changes

• The definition of amended and restated AIG credit agreement will be revised to clarify that the interest rate under the amended facility will be the same as under the existing AIG credit agreement;

• The definition of Credit Suisse DIP facility will be revised to clarify that the company's debtor-in-possession financing facility will be provided in two separate tranches of $1 million and $500,000;

• The deadline for filing a plan supplement will be changed to seven days before the confirmation hearing from 10 days before the hearing;

• A clause will be added to clarify that modifications to new credit agreements and the Credit Suisse exit facility agreement must be acceptable to the agreement counterparties;

• The plan will specify that the confirmation order will incorporate release, injunction, discharge and exculpation provisions; and

• A new provision will be added that the court would not have jurisdiction over disputes related to the company's post-effective date secured loan facilities after the effective date.

Creditor treatment

As previously reported, TBS filed bankruptcy to implement a debt restructuring agreement reached with its lenders.

The company said its plan will restructure its secured debt and pay in full all allowed unsecured claims to align TBS' operations and capital structure with the current and expected demand in the global markets.

Under the plan, ownership of the company's operating subsidiaries will be transferred to a newly formed entity that will be principally owned by the lenders.

Old equity holders will receive no distributions, and TBS will cease to be a reporting public company, TBS said in a February news release.

Debtor-in-possession financing claims and pre-bankruptcy secured debt are to be restructured so as to provide new liquidity, extended maturity dates and other terms that will allow the new entity's successful emergence from Chapter 11 and future viability.

Lender agreement

Specifically, under the lender agreement:

• Amounts owed under an existing Bank of America credit agreement and exiting DVB credit agreement will be restructured into a new term loan with a new senior secured cash pay loan trance, which is a second-lien $30 million term loan due Sept. 30, 2016, and a new senior secured PIK loan tranche, which is a $121 million second-lien payment-in-kind/toggle term loan due June 30, 2017.

As a condition to the receipt of its portion of consideration, each holder of a Bank of America syndicate claim or a DVB syndicate claim must first comply with new credit agreement distribution procedures;

• Amounts owed under an existing Credit Suisse credit agreement will be restructured into a term loan in the amount of at least $18.31 million with an interest rate of Libor plus 300 basis points and a June 30, 2017 maturity.

Under this facility, Credit Suisse will receive cash flow generated by the vessels that secure the existing loan until the amended and restated credit agreement can be fully repaid. Credit Suisse must also comply with new credit agreement distribution procedures;

• Amounts owed under an existing AIG credit agreement will be restructured into a $4.5 million term loan that will mature at least 180 days after the plan effective date and accrue interest at 10%.

Under this loan, AIG will receive the cash flow generated by the vessels securing the credit agreement until the amended loan is fully repaid through the sale of the vessels, which is expected to occur within 180 days of the plan effective date.

AIG must also comply with new credit agreement distribution procedures; and

• Under an RBS settlement agreement, amounts owed on an RBS credit agreement have been satisfied by the turnover of vessels that secure the credit agreement before the bankruptcy filing date.

TBS, a Dublin, Ireland-based transportation services company, filed for bankruptcy on Feb. 6. The Chapter 11 case number is 12-22224.

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