A big group of bondholders are allegedly feeling so poorly treated by Danish shipper J. Lauritzen that they plan to vote against the carrier's proposal to push back debt totaling NOK 500 million, or USD 60 million.
At any rate, upwards of half the lenders, according to asset manager Alfred Berg, plan to vote no when the proposal to postpone payment of the loan is subject to a vote at a meeting in Oslo on March 14.
This would be enough to block the proposal, which needs backing from two thirds of the bondholders. And this is bad news for J. Lauritzen, which is currently working to settle a crucial debt deal with its banks and owners, Lauritzen Fonden.
The deal is contingent on the bondholders agreeing to postpone a majority of the NOK 500 million loan by four years, to mature in 2021 instead of October 2017.
But several of the owners in the listed loan are apparently angered by the fact that they were not included in the negotiations on par with the banks. As such, they will allegedly vote no to the proposal as it looks now, thus knocking down the bank package that would otherwise ensure J. Lauritzen as a going concern.
Norwegian investor heading the opposition
The opposition is headed by capital manager Alfred Berg Kapitalforvaltning, one of the biggest professional owners in the loan. The capital manager is now planning to vote no at the meeting in Oslo some two weeks from now, and the firm says that it is far from alone in doing so.
"We've been contacted by a large number of bondholders, who account for close to 50 percent of the loan. Everyone is in principle against the proposal and the manner in which J. Lauritzen failed to include the bondholders in the negotiations with the banks," says Tom Hestnes, senior portfolio manager, to FWAM sister site ShippingWatch.
"We're now mobilizing a large group which will vote no to the proposal for principal reasons later this month," he says, though stressing that Alfred Berg is prepared to negotiate a new deal if the carrier wishes to do so.
The proposal to the bondholders would see J. Lauritzen pay USD 20 million on the loan now, while pushing the remainder of the loan to October 2021.
A requirement from the carrier's banks and owner Lauritzen Fonden is that the bondholders accept this proposal. If not, the debt deal which CEO Mads Zacho has worked on settling since September last year, when he replaced Jan Kastrup-Nielsen as chief executive, will collapse.
Signs of support
When the proposal was presented in relation to the carrier's annual report 2016 last Friday, the first signs from bondholders, according to Zacho, indicated support for the proposal.
Whether some parties have changed their mind since then, or the carrier has not been in contact with the bondholders now planning to vote no, remains unknown.
ShippingWatch tried throughout Thursday to get a comment from J. Lauritzen, but this has not yet been possible. ShippingWatch is still trying to get the carrier's reaction to the opposition among the bondholders.
Alfred Berg Kapitalforvaltning has once before been in conflict with Lauritzen Fonden, namely in relation to the restructuring of company Axis Offshore, which was owned by the fund until the turn of the year
That case resulted in Axis Offshore being criticized by the Oslo Stock Exchange in December 2016 due to differential treatment of its bondholders.
English Edit: Daniel Logan Berg-Munch