TBS International and Banks Agree to Amend Credit Facilities and Waive All Defaults; Key Management Commits to Provide New Equit
31 Januar 2011 - 3:00PM
Marketwired
TBS International plc (NASDAQ: TBSI) (the "Company") announced
today that it has entered into amendments to its credit facilities
with all of its lenders, including AIG Commercial Equipment,
Commerzbank AG, Berenberg Bank and Credit Suisse and syndicates led
by Bank of America, N.A., The Royal Bank of Scotland plc and DVB
Group Merchant Bank (the "Credit Facilities"). The amendments
restructure the Company's debt obligations by revising the
principal repayment schedules under the Credit Facilities, waiving
any existing defaults, revising the financial covenants, including
covenants related to the Company's consolidated leverage ratio,
consolidated interest coverage ratio and minimum cash balance, and
modifying other terms of the Credit Facilities.
As part of the amendments, Messrs. Joe Royce, the Company's
President and Chief Executive Officer and the Chairman of the
Board, Gregg McNelis, the Company's Senior Executive Vice President
and Chief Operating Officer, and Larry Blatte, the Company's Senior
Executive Vice President, have committed to purchase a pro rata
share of up to $10 million of a new series of preference shares.
The Company intends to file a registration statement in the near
future with the Securities and Exchange Commission under which it
will conduct a rights offering that will enable all holders of the
Company's ordinary shares at the close of business on the record
date for the rights offering, who desire to purchase similar
preference shares to make such purchases on the same terms and
conditions. You must be a holder of ordinary shares on the record
date, which the Company expects will be Monday, February 7, 2011,
in order to participate in the rights offering.
Ferdinand Lepere, Senior Executive Vice President and Chief
Financial Officer commented, "I am very pleased that we were able
to reach a consensus with 100% of our two dozen banks, spanning
seven different loan facilities. I would like to thank our lenders
and all of the professionals who worked tirelessly to achieve this
restructuring. I believe TBS is now in a position to navigate the
challenging global shipping market confronting us."
The Company currently expects to be in compliance with all
financial covenants and other terms of the amended Credit
Facilities through maturity. As a result of the amendments to the
Credit Facilities, the Company intends to classify the long-term
portion of the Company's outstanding debt at December 31, 2010 as
long-term debt in its consolidated balance sheet, thus remediating
the uncertainty regarding TBS's ability to fulfill its financial
commitments as they become due, which uncertainty was the condition
that raised substantial doubt about TBS's ability to continue as a
going concern.
This announcement shall not constitute an offer to sell nor a
solicitation of an offer to buy any securities, nor shall there be
any sale of any securities in any state or jurisdiction in which
the offer, solicitation or sale of securities would be unlawful.
Any public offering of securities in the rights offering will be
made by means of a prospectus that may be obtained from the Company
and will contain detailed information about the Company and the
offering.
For additional details, please refer to TBS's Form 8-K to be
filed with the Securities and Exchange Commission.
Forward-Looking Statements "Safe Harbor"
Statement under the Private Securities Litigation Reform Act of
1995
This press release contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
based on management's current expectations and observations.
Included among the factors that, in the Company's view, could cause
actual results to differ materially from the forward looking
statements contained in this press release are the following:
- changes in demand for and pricing of the Company's services,
both of which are difficult to predict due to continuing economic
uncertainty;
- the effect of a decline in vessel valuations;
- the Company's ability to maintain financial ratios and comply
with the financial covenants required by its credit facilities as
amended;
- the Company's ability to finance its operations and raise
additional capital on commercially reasonable terms or at all;
- changes in rules and regulations applicable to the shipping
industry, including legislation adopted by international
organizations such as the International Maritime Organization and
the European Union or by individual countries;
- actions taken by regulatory authorities;
- changes in trading patterns, which may significantly affect
overall vessel tonnage requirements;
- changes in the typical seasonal variations in charter
rates;
- volatility in costs, including changes in production of or
demand for oil and petroleum products, crew wages, insurance,
provisions, repairs and maintenance, generally or in particular
regions;
- additional material declines or continued weakness in shipping
rates;
- changes in general domestic and international political
conditions;
- changes in the condition of the Company's vessels or applicable
maintenance or regulatory standards which may affect, among other
things, the Company's anticipated drydocking or maintenance and
repair costs;
- increases in the cost of the Company's drydocking program or
delays in its anticipated drydocking schedule;
- China Communications Construction Company Ltd./Nantong Yahua
Shipbuilding Group Co., Ltd.'s ability to complete and deliver the
remaining multipurpose tweendeckers on the anticipated schedule and
the ability of the parties to satisfy the conditions in the
shipbuilding agreements;
- the possible effects of pending and future legislation in the
United States that may limit or eliminate potential U.S. tax
benefits resulting from the Company's jurisdiction of
incorporation;
- Irish corporate governance and regulatory requirements which
could prove different or more challenging than currently expected;
and
- other factors that are described in the "Risk Factors" sections
of the Company's reports filed with the Securities and Exchange
Commission.
About TBS International plc: TBS provides
worldwide shipping solutions to a diverse client base of industrial
shippers through its Five Star Service: ocean transportation,
projects, operations, port services, and strategic planning. The
TBS shipping network operates liner, parcel and dry bulk services,
supported by a fleet of multipurpose tweendeckers and handysize/
handymax bulk carriers, including specialized heavy-lift vessels
and newbuild tonnage. TBS has developed its franchise around key
trade routes between Latin America and China, Japan and South
Korea, as well as select ports in North America, Africa, the
Caribbean and the Middle East. Visit our website at
www.tbsship.com.
For more information, please contact: Ferdinand V. Lepere Senior
Executive Vice President and Chief Financial Officer TBS
International plc Tel. 914-961-1000 InvestorRequest@tbsship.com
Investor Relations / Media: Nicolas Bornozis Capital Link, Inc. New
York Tel. 1-212-661-7566 E-mail: tbs@capitallink.com
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