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Chapter 11 process unfolds

Chapter 11 process unfolds
US Shipping Partners has put a price-tag of $275m-$315m on itself, in an attempt to provide interested bidders with a valuation as its Chapter 11 process unfolds.

US Shipping Partners has put a price-tag of $275m-$315m on itself, in an attempt to provide interested bidders with a valuation as its Chapter 11 process unfolds.

US Shipping Partners has put a price-tag of $275m-$315m on itself, in an attempt to provide interested bidders with a valuation as its Chapter 11 process unfolds.

The development came after US Shipping rejected a $255m takeover bid by Rand Logistics, and Rand responded with a letter that sweetened its offer marginally to $260m.

Papers filed by US Shipping Partners in the US bankruptcy Court in New York include a new section that cites work done by financial advisor Greenhill to set out an ?enterprise value?.

Taking into consideration current market conditions, Greenhill has valued US Shipping at $275m-$315m, with a mean of $295m, with an assumed consumation date of September 30.

Under US Shipping"s pre-packaged rescue, the fate of which lies in the hands of the bankruptcy court judge, lenders of $333m in loans and holders of $100m in bonds would initially get 50% ownership each of the company, which would be modified to a 45:45:10 structure after management gets 10% of the reorganised company.

US Shipping filed for Chapter 11 protection in April after spending a year on the market, hoping to attract buyers. Company executives have said there were interested bidders last year, but the financial market crash prevented many of these bids being formalised.

Rand Logistics last month offered to buy most of US Shipping"s Jones Act deepsea assets, citing a ?compelling strategic fit? with its Great Lakes business.

US Shipping"s board, in consultation with secured creditors and Greenhill, rejected the $255m bid as inferior to its own reorganisation.

Rand Logistics chairman and chief executive Laurence Levy sent US Shipping chief executive Ronald O"Kelley a follow-up letter, which said the assumptions of its valuation that US Shipping used to reject the Rand offer would turn out to be ?so highly speculative as to be illusory?.

Mr Levy cited developments at Overseas Shipholding Group, which is in the process of buying back OSG America in dire market conditions, as proof that Rand"s plan would be a safer bet for US Shipping"s creditors.

Mr Levy unveiled a new offer that amounts to some $260m, comprising $193.5m in cash and the remainder in financial instruments including bonds.

The process of offering these alternative proposals to the creditors need not be contentious or protracted, Mr Levy said.

However, he warned that should US Shipping would not engage with Rand, the latter would ?pursue any and all means to bring to the attention of the creditors and the [bankruptcy] court the inadequacies and infeasibility of the existing plan, the debtors" failure to explore alternatives, and the harm which [the reorganised US Shipping] and creditors will suffer?.

A hearing in the bankruptcy court is scheduled for August 13 in New York.

www.TurkishMaritime.com.tr

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