Daily News: March 28, 2012

General Maritime Announces Agreement With Creditors

General Maritime Corporation announced it reached an agreement on a modified plan of reorganization with the Official Committee of Unsecured Creditors, funds managed by Oaktree Capital Management, L.P. and their investment entities and holders of more than 40% of the company’s senior notes. The Modified Plan is also supported by 66-2/3% of the company’s key senior lenders, including its bank group, led by Nordea Bank Finland, New York Branch as administrative agent. The Modified Plan will allow for a consensual reorganization of the Company, substantially deleverage the company’s balance sheet, provide a greater recovery to unsecured creditors, and position the company to be a financially stronger, competitive global enterprise.

Jeffrey D. Pribor, General Maritime’s CFO, said, “This is an important step to completing the restructuring process. The Modified Plan, which is supported by our bank lenders, the Oaktree Funds and the Creditors’ Committee, provides for enhanced recoveries for unsecured creditors and is designed to clear a path to confirmation.”

Under the Modified Plan, the company will no longer be implementing the previously announced rights offering. Instead, each class of claims or interests against the company will receive the same or better treatment than under the original plan of reorganization. Holders of allowed unsecured claims against the company and its debtor subsidiaries that guarantee the company’s obligations under its secured facilities will share in $6 million in cash, warrants to purchase 3% of the equity in the reorganized company and 2% of the reorganized equity, increasing their estimated recovery from 0.75-1.88% under the original plan of reorganization to approximately 5.41% under the Modified Plan. In addition, the Modified Plan resolves all disputes between the company, the pre-petition senior lenders, the Oaktree Funds, certain large unsecured bondholders and the Creditors’ Committee with respect to the original plan, thereby avoiding the expense and delay caused by a contested confirmation process.

The Modified Plan continues to provide for an infusion of $175 million in new capital from the Oaktree Funds. To facilitate the implementation of the agreed-upon restructuring, the company, the Oaktree Funds, the Creditors’ Committee, and holders of over 40% of the Senior Notes entered into a plan support agreement. The Bankruptcy Court agreed to hear a motion to approve the plan support agreement and modifications to the plan on April 2.

Following the completion of the restructuring process, General Maritime will reduce its funded indebtedness by approximately $600 million and continue to provide international seaborne energy transportation services.

Kramer Levin Naftalis & Frankel LLP is serving as the company’s legal advisor, and Moelis & Company is serving as the company’s financial advisor.

General Maritime Corporation is a crude and products tanker company operating principally within the Atlantic basin.

Previously on abfjournal.com:

Court Approves General Maritime Disclosure Statement, Friday, March 02, 2012