By Erik Larson and Joe Schneider
Excel listed assets of $2.7 billion and debt of $1 billion in a Chapter 11 petition filed yesterday in U.S. Bankruptcy Court in White Plains, New York. A group of senior lenders owed $771 million — backed by almost all of the company’s assets — signed off on a restructuring plan before the filing.
The agreement and the court process “provide for a clear and expedited path to strengthen our financial profile and position Excel Maritime for future growth and success,” Chairman Gabriel Panayotides said in a statement yesterday.
The “prepackaged” reorganization plan, which needs approval from a bankruptcy judge, calls for $50 million in new cash and the release of $30 million more that was restricted, according to yesterday’s statement. The Athens-based company, which ships commodities including iron ore, coal and grains, said the court process won’t affect its suppliers or customers.
Excel’s financial situation was brought on by “macro- economic conditions that have led to volatility and overall declines in charter rates,” the company said in a statement issued last month.
Excel’s creditors on June 10 began voting on a plan that called for secured lenders to take ownership, the company said in a filing with the U.S. Securities and Exchange Commission. That plan is “substantially similar” to the one linked to the Chapter 11 filing, the company said yesterday.
“Because the company’s senior secured lenders’ claims are vastly under water, the lenders are entitled to receive almost all of the value of the reorganized company,” Excel said in the regulatory filing. Under the deal, the maturity of the company’s senior secured facility would be extended through 2018.
Excel also owes $150 million on 1.875 percent unsecured convertible notes, the company said. Holders of the notes and other unsecured creditors, with claims totaling $163 million, will get a 3 percent recovery, according to the filing. Their recovery will come from $5 million held by Excel’s non-bankrupt joint-venture affiliate, Christine Shipco LLC, Excel said.
The company said its total enterprise value is estimated to be from $575 million to $625 million.
The case is In re Excel Maritime Carriers Ltd. 13-bk-23060. U.S. Bankruptcy Court, Southern District of New York (White Plains).
Copyright 2013 Bloomberg.