Berlian Laju Tanker agrees to terms of further company restructuring

By Caroline Salls

Pittsburgh, April 24 – Berlian Laju Tanker Tbk. agreed to binding terms of a further restructuring of the company and some of its subsidiaries, according to a news release.

Berlian said its existing PKPU plan is based on market forecasts being met and substantial fundraising over a 10-year repayment period.

However, because of delayed market recovery and a lack of bank financing and investor appetite for the industry, the company said there is a need for further restructuring of its existing plan and facility documents.

Berlian said the agreement includes a release of assets worth $86.6 million to the company and the waiver of all unsecured deficiency claims.

Specifically, each borrower under the company’s facility is liable for the entire $584.1 million of debt outstanding under the facility documents. The total amount of deficiency claims being waived is the sum of the liability for each borrower. These claims would otherwise need to be paid in full before any other Berlian creditor or stakeholder would be entitled to any recovery.

The company also entered a entered a restructuring support agreement with agent DNB Bank ASA, Singapore Branch, lenders holding at least 66 2/3% of the participation of the outstanding facility claims under the company’s senior secured credit facilities agreement, facility agreement borrower Gold Bridge Shipping Corp., president commissioner Hadi Surya, director Siana Surya and shareholders PT Tunggaladhi Baskara and Meadowstream Ltd.

Restructuring terms

Under the proposed restructuring

• A new company and its subsidiaries will acquire specified vessels, the shares in Chembulk Trading II LLC, all assets of specified scheme entities and balances in designated accounts;

• The new company’s common stock will all be held by the facilities agreement lenders or their affiliates, subject to dilution by new company warrants, any new company common stock issued under a management incentive program and any further issuances of new company common stock;

• The company parties will transfer the vessels and designated assets to the new company and/or its subsidiaries under schemes of arrangement implemented under Section 210 of the Companies Act, Chapter 50 of Singapore;

• The company parties will consent to a consensual foreclosure process under the New York Uniform Commercial Code in connection with the security held by the agent over the Chembulk Trading II shares to transfer the shares to the new company or a designated subsidiary;

• The company parties will cooperate with the enforcement of the security held by the agent over the designated accounts, resulting in a transfer of all account balances to the new company and/or its subsidiaries;

• Berlian Laju Tanker will reach agreement with other creditors to support the restructuring, including through the approval of an amendment of the creditors under its existing PKPU plan;

• If both the closing and plan amendment occur by Sept. 30, the company will receive releases from secured claims and deficiency claims under the facility agreement, the issuance of warrants entitling Berlian Laju Tanker to purchase 10% of the new company common stock, preferred redeemable equity interests in the new company, which will be redeemed over a five-year period in equal annual installments, a 50% refund of the lenders’ fees and expenses payable by the company that are incurred from March 1 through Sept. 30, the release for the benefit of the company of $10 million of cash currently posted as cash collateral under a $29.2 million standby letter-of-credit facility and all liens securing related reimbursement obligations and releases in favor of the company and Surya parties.

The new preferred equity interests will have an initial stated value of up to $10 million but will be reduced to $5 million if the restructuring is not completed by Aug. 31; and

• If the closing or amendment approval occurs after Sept. 30 but before the Dec. 20, 2015 outside date, the company will only receive the mutual releases and deficiency claim waivers.

Berlian Laju Tanker is a Jakarta, Indonesia-based shipping company.

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