Havila Shipping ASA (" Havila Shipping " or the " Company ") today announces a financial restructuring plan (the " Restructuring Plan ") which is supported by the secured bank lenders and Havila Holding AS (" Havila Holding "), its largest shareholder. The Restructuring Plan has also obtained support from the Company's unsecured bank lenders . The Restructuring Plan will enable Havila Shipping to endure the severe market downturn and to continue safe operations of its fleet to the benefit of all stakeholders.
The Restructuring Plan will provide Havila Shipping with a financial runway until November 2020, replacing approx. NOK 3.2bn of debt maturities in the period 2017-2019 with around NOK 67 million of minimum fixed amortization. Furthermore, the net interest bearing debt will be reduced by approx. NOK 1.6bn through injection of new risk capital, sale of non-core vessels, discounted debt repurchase and conversion of debt to equity.
The Restructuring Plan is subject to approval from the bondholders in the Company's bond loans HAVI 04, HAVI 06/07 and HAVI 08. A summons to bondholders' meetings will be sent today, and the respective meetings will be summoned to take place on 23 November 2016 (the " Bondholders' Meetings "). The Company has maintained a close dialogue with representatives of key secured and unsecured bondholders through the process of developing the Restructuring Plan. However, no pre-approval for the Restructuring Plan from any of the bondholders exists.
Given the current situation, the Company's Board of Directors perceives this plan to be the only available and final alternative to obtain a consensual restructuring solution that is likely to be accepted by its largest group of creditors. Pursuant thereto, a contingency plan supported by the secured bank lenders is in place if the required approval of the Restructuring Plan fails.
Subject to approval by the bondholders in the Bondholders' Meetings, the Board of Directors of the Company intends to send notice to the shareholders for an extraordinary general meeting to approve the necessary corporate resolutions required to implement the Restructuring Plan, including (i) reduction of the par value of the shares, (ii) conversions of debt to shares, (iii) a private placement of shares directed to the Company's main shareholder Havila Holding (the " Private Placement "), (iv) approval of convertible loan from Havila Holding, (v) issuance of warrants to the Company's unsecured lenders, (vi) a subsequent repair issue directed towards the Company's shareholders not invited to participate in the Private Placement, and (vii) such other corporate resolutions required to implement the Restructuring Plan.
The Restructuring Plan will result in a substantial dilution of all existing shareholders, including those not invited to subscribe for shares in the Private Placement. The contemplated repair offering will not compensate for the dilutive effect for the remaining shareholders, but will be offered on terms equal to the terms offered to Havila Holding for subscription in the Private Placement. In addition, shareholders, including those shareholders participating in the repair offering, are facing further dilution through subsequent share issues inherent in and as a consequence of the Restructuring Plan, involving conversion of debt to equity and exercise of warrants. Having duly considered available alternatives and previously failed initiatives and attempts to find a viable solution for the immediate need for a financial restructuring of the Company, the Board of Directors is of the opinion that the deviation from the principle of equal treatment is an appropriate remedy strictly necessary and required, and in the common interest of the Company and the shareholders, given the increasingly challenging financial situation of the Company, the prevailing market conditions, the terms of the Restructuring Plan and the recognition by the Board of Directors that the described plan is the only available opportunity to complete a financial restructuring of the Company in order to protect the interest of the creditors and to preserve remaining shareholder value.
The Restructuring Plan is comprehensive, and the Company encourages all affected stakeholders to refer to the enclosed restructuring term sheet for a detailed description. The main elements of the Restructuring Plan are as follows:
On the Restructuring Implementation Date the following shall take place:
New Equity
- NOK 118.2 million of new equity and NOK 46.2 million of convertible shareholder loan to be provided from current main shareholder Havila Holding (new equity to benefit from certain anti-dilution protection going forward initially securing 51% ownership). The estimated subscription price for the new equity corresponds to NOK 0.125 per share.
- Secured Creditors to convert to new shares approximately NOK 135 million of accrued interest from and including 16 February 2016 up to and including 30 September 2016 at NOK 0.24 per share.
- The present shareholders will after the equity transactions as set out above be holding 2.5 % of the shares in the Company. A repair issue of NOK 30 million will be offered towards existing shareholders (excluding Havila Holding) at NOK 0.125 per share.
Unsecured Debt
- All unsecured debt (totalling NOK 950 million) will be offered (a) 15% of outstanding principal amount and (b) 500 million warrants which may be exercised for shares in a period of 5 years at NOK 0.156 per share in cash (25 % premium to the subscription price of the new equity).
Divestment of Non-Core Vessels
- Vessels divided into two categories labelled "core vessels" and "non-core vessels", with the latter category divided into three sub-groups (named I, II and III). All non-core vessels to be marketed for sale going forward.
- Secured Creditors on the Non-Core Vessels 'Group I' Debt will receive NOK 44 million of already pledged cash.
Amendments to surviving debt implemented on the Restructuring Implementation Date:
Amortization and maturities
- All fixed amortisations on Secured Debt to be cancelled, except for certain fixed amortisation on certain vessels. Cash sweep of 50% of cash flow on core vessels net of inter alia costs and fixed amortisation.
- All Secured Debt shall mature on 7 November 2020.
Interest rates
- No change in credit margins, save for the Subsea Bonds to be merged into one tranche with an interest rate of 3M NIBOR + 450 bps p.a. and Non-Core Vessels 'Group I' Debt to accrue interest at 5% PIK.
Covenants
- Financial covenants suspended except minimum cash of NOK 50 million (consolidated on group level).
Subsequent conversions and amendments:
Non-Core Vessels
- Non-Core Vessels 'Group I' Debt and Non-Core Vessels 'Group III' Debt not fully repaid after sale of the relevant vessels is converted to shares at a conversion price of NOK 0.981 per share (which equals a conversion rate of 12.7%).
- If vessels in the Non-Core Vessel "Group I" are not sold within 18 months commencing on the date the Restructuring Plan is implemented (the " Restructuring Implementation Date "), a fixed amount of NOK 250 million will be converted at a conversion price of NOK 0.981 per share (which equals a conversion rate of 12.7%) and the remaining debt to be left until such vessels are sold.
- Non-Core Vessels 'Group II' Debt not fully repaid on a sale of the relevant vessels will be secured by 2 nd lien collateral in the vessel Havila Venus.
- Relevant Secured Creditors to cover all costs relating to respective non-core vessels from the date falling 18 months after the Restructuring Implementation Date.
Non-Performing Vessels
- Core vessels which, in the period of 18 to 24 months after the Restructuring Implementation Date, generates less EBITDA than 2% of Secured Debt, will be declared 'Non-Performing' and may, by the relevant Secured Creditor:
- be taken over (against discharge of all secured debt); or
- be sold (against conversion of any deficit to shares at a conversion price of NOK 0.981 per share (which equals a conversion rate of 12.7%)).
- If such right is not exercised, interest on such vessel shall be paid as PIK and, from the date falling 30 months from the Restructuring Implementation Date, the relevant Secured Creditor shall cover all net costs relating to such vessel.
- Upon payment of outstanding interest and a portion of outstanding principal debt (which amount shall be raised as new equity), a Non-Performing Vessel may be re-declared as a Core Vessel.
The Restructuring Plan is subject to (i) relevant credit committee approvals from the secured and unsecured bank lenders, (ii) approval from the relevant corporate bodies in Havila Shipping and Havila Holding in respect of the equity issues and the debt conversions as set out in the term sheet, and (iii) further subject to final documentation and customary closing conditions.
The contributions of all parties are mutually conditional upon each other.
Enclosures
The summons for the Bondholders' Meetings and a company presentation are enclosed to this announcement.
Advisors
Swedbank Norway and Fearnley Securities are acting as financial advisors to the Company in connection with the Restructuring. Wikborg, Rein & Co Advokatfirma DA is acting as legal advisor to the Company.
Contact persons for further information are:
Njål Sævik Chief Executive Officer +47 909 35 722 njaal@havila.no
Arne Johan Dale Chief Financial Officer +47 909 87 706 ajd@havila.no
This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.
Attachments:http://www.globenewswire.com/NewsRoom/Attachm...b53a9f2615
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