Borealis Finance has cancelled a bondholder meeting as talks continue to boost its liquidity.
The company, controlled by private equity giant KKR, had set the meeting for Wednesday as it sought to amend the terms of its $200m issue.
The boxship and bulker owner said it wants to preserve cash "in light of the adverse impact on the container shipping markets and the company from the global Covid-19 pandemic".
Borealis has revealed average charter rates for its vessels have plunged 30% since December, and ship values are under pressure.
This will "severely impact" its liquidity and financial position.
"The company has had positive discussions with bondholders over the last few weeks, leading to support for the proposed amendments from a significant number of bondholders," Borealis Finance added.
"At the same time, the company is still engaged in constructive dialogue with certain larger bondholders and has consequently decided to cancel the scheduled bondholders’ meeting until such discussions are concluded."
Maturity extension is the aim
Borealis and KKR want a temporary waiver of financial covenants to the end of 2021, an extension of the bond maturity date by 18 months to May 2024, and the ability to release proceeds from the sale of up to two collateral vessels, provided an equal amount of cash equity is injected into the company.
Compensation for bondholders includes semi-annual amortisations from the end of 2021, increasing call premiums and an up-front fee of 0.5% of the outstanding bond amount.
Bondholders also want evidence that cash equity of $8m has been put into the company.
The group had a fleet of 25 containerships and three bulkers at the end of March, but has since agreed to sell a bulker.
TradeWinds has reported Greek bulker owner Modion Maritime as the buyer of the 75,000-dwt Paganini (built 2008) for $8.1m.
Borealis' total assets amounted to $334.7m as of 31 March, with equity standing at $120.5m. Interest-bearing debt is $196.9m.
The first quarter net loss was $0.96m, compared to $5.25m in 2019, as revenue grew to $23m from $20m.
