The trust was given until April 15th by the HSH Syndicate, comprising HSH Nordbank and DBS Bank, to come up with a new restructuring plan which would ensure a higher level of total recoveries than under a winding up of the trust.
The talks included industry, private and distressed investors and were aimed at raising new equity, provided that HSH would be willing to forgive the existing loans that it has extended to the trust if the trust secures similar debt forgiveness from the noteholders and its other unsecured creditors.
However, there was no consensus among creditors and potential investors as they denied support to injections of the new capital amid challenges in obtaining noteholders’ and other creditors’ consent for the debt write-offs.
“In light of the aggravated illiquidity and lack of new investors, the Trustee-Manager opines that it is impracticable to continue the trust and that it shall therefore be wound up. The winding up decision is made in light of no other possible alternatives to restructure the liabilities of the trust,” the trust said.
The trust added that it was is in advanced discussions with a potential buyer for its assets which may allow it to distribute cash recoveries upfront to unsecured creditors. However, no deal has been finalized at this stage.
As disclosed, it is expected that the business operations of the trust’s vessels will remain unaffected by this process and that the trust will continue to meet its ongoing charter party obligations.
The trust will also be submitting an application to the Singapore Exchange Securities Trading Limited for delisting.
Following the unsuccessful attempt in December 2016 to obtain noteholders’ approval to restructure the SD 100 million 8.45% medium-term notes issued by the trust, which was a condition for the restructuring of its secured bank loans via a USD 260 million new facility agreed to by its senior lenders, the trust has been unable to reach an alternative deal with its lenders to restructure debts.
This has led to the failure to repay the USD 196.7 million to the HSH Syndicate due on 31 March 2017 and the SD 4.3 million coupon payment to noteholders in November 2016, as well as various breaches in loan covenants.