17 November 2011
Tanker operator General Maritime Corporation (NYSE: GMR) says it has filed for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Substantially all of the company's subsidiaries – with the exception of those in Portugal, Russia and Singapore as well as certain inactive subsidiaries– have also commenced Chapter 11 cases.
The company says the bankruptcy filing is necessary to implement a restructuring agreement reached with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P.
General Maritime says the restructuring agreement and related equity commitment letter have the support of over two thirds of the company's obligations from its banks and Oaktree. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. Under the terms of the agreement, General Maritime expects to substantially reduce its funded indebtedness and enhance its liquidity profile. It says that operations are expected to continue without interruption.
In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new debtor-in-possession (DIP) financing from a group of lenders led by Nordea as administrative agent. The initial amount of the DIP is $75 million, however, the credit facility contemplates that, if needed, the company will have access to another $25 million of future financing, subject to the applicable lenders' agreement, certain other conditions and further order of the Bankruptcy Court.
November 17, 2011
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