TBS Int'l (TBSI) Hit After Filing for Ch. 11 Bankruptcy; Gets $42.3M of DIP Financing
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Shipping company TBS International plc (Nasdaq: TBSI) is getting slammed Tuesday following a late release Monday that the company is seeking protection under Chapter 11 of the U.S. Bankruptcy Code.
Details from the release: "...it has reached an agreement with its lenders on the terms of a comprehensive debt restructuring. The proposed plan will restructure the Company's secured debt and pay in full allowed claims of unsecured creditors, to align the Company's operations and capital structure with the current and expected demand in the global markets. To implement the restructuring, the Company and its subsidiaries negotiated and received affirmative votes from all voting lenders to accept a pre-packaged chapter 11 Plan of Reorganization that was filed today with the United States Bankruptcy Court in the Southern District of New York. With the full support of its lenders, the Company has requested a prompt combined hearing to approve the disclosure statement for the Plan and to confirm the Plan.
The Company is taking actions necessary to ensure that the chapter 11 filing does not affect the Company's operations, its vendors or customers. The Company's operations will continue as usual during the chapter 11 process, which is expected to be concluded within 60 days. The Company has sought approval to pay all foreign and critical vendors in the ordinary course, as well as customary relief to continue its wage and benefit programs for its employees. Pursuant to the Plan, ownership of the Company's operating subsidiaries will be transferred to a newly-formed entity that will be owned principally by the lenders. Old equity holders will receive no distributions, and the Company will cease to be a reporting public company.
Notably, the Company has, subject to court approval, obtained debtor-in-possession (DIP) financing of $42.8 million to fund operations during the Chapter 11 cases. This financing is provided entirely by the Company's existing lenders, including Bank of America, DVB Bank, Toronto Dominion Bank and Credit Suisse. Under the Plan, the DIP financing claims and pre-petition secured debt are to be restructured so as to provide new liquidity, extended maturity dates and other terms sufficient to permit the new entity's successful emergence from Chapter 11 and future viability."
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Details from the release: "...it has reached an agreement with its lenders on the terms of a comprehensive debt restructuring. The proposed plan will restructure the Company's secured debt and pay in full allowed claims of unsecured creditors, to align the Company's operations and capital structure with the current and expected demand in the global markets. To implement the restructuring, the Company and its subsidiaries negotiated and received affirmative votes from all voting lenders to accept a pre-packaged chapter 11 Plan of Reorganization that was filed today with the United States Bankruptcy Court in the Southern District of New York. With the full support of its lenders, the Company has requested a prompt combined hearing to approve the disclosure statement for the Plan and to confirm the Plan.
The Company is taking actions necessary to ensure that the chapter 11 filing does not affect the Company's operations, its vendors or customers. The Company's operations will continue as usual during the chapter 11 process, which is expected to be concluded within 60 days. The Company has sought approval to pay all foreign and critical vendors in the ordinary course, as well as customary relief to continue its wage and benefit programs for its employees. Pursuant to the Plan, ownership of the Company's operating subsidiaries will be transferred to a newly-formed entity that will be owned principally by the lenders. Old equity holders will receive no distributions, and the Company will cease to be a reporting public company.
Notably, the Company has, subject to court approval, obtained debtor-in-possession (DIP) financing of $42.8 million to fund operations during the Chapter 11 cases. This financing is provided entirely by the Company's existing lenders, including Bank of America, DVB Bank, Toronto Dominion Bank and Credit Suisse. Under the Plan, the DIP financing claims and pre-petition secured debt are to be restructured so as to provide new liquidity, extended maturity dates and other terms sufficient to permit the new entity's successful emergence from Chapter 11 and future viability."
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