Lenders to Giuseppe Bottiglieri Shipping Co (GBSC) would support a rival restructuring bid for the indebted Italian shipping company if judges eventually decide to unblock it, according to the Lighthouse group behind the competing offer.
Lenders seeking to recover nearly $400m of GBSC debt voted late last month to back an in-house restructuring bid submitted by the Bottiglieri family and its private equity partner, Bain Capital Credit.
But that decision could be reversed, according to Lighthouse, a Greek-Italian joint venture that submitted a rival bid only to see it thrown out by judges in Naples. The ruling is currently under appeal.
Lighthouse was formed by the Zagari family's Augustea Holdings of Italy and Greece's Oceanbulk Maritime, which is led by Petros Pappas.
On 26 February, the Naples appeals court rejected a Lighthouse motion to suspend the ruling against it before bankers finished voting two days later, saying it did not want to delay ongoing restructuring efforts. However, at the same time, it agreed to rule on the substance of the case after a hearing on 18 April.
“The banks have confirmed numerous times to us that they will request to reopen the voting session, in case the Lighthouse proposal will be admitted to vote, as a result of a final decision by the court,” Lighthouse said in a statement to TradeWinds.
The lenders, including Italian banks Banca Monte dei Paschi di Siena, Monte dei Paschi di Siena Capital Service, Banco di Napoli and UniCredit backed the in-house Bottiglieri bid because any other choice would have left the company in limbo, the Lighthouse statement suggested.
“Given a deadline of 28 February for voting on the proposal submitted by Bain and GBSC, most of the Italian lenders of GBSC were left with no choice but to vote for the Bain/GBSC proposal,” it said.
They took the vote "with the condition to support the Lighthouse proposal, should it become admissible by the appeals court in April”. One lender voted down the Bottiglieri proposal.
However, GBSC has rejected Lighthouse's contention that a door remains open to its rival bid.
In a statement, the company said the appeals court decision last month does not foresee "a changing scenario" nor an impediment to final approval of the GBSC/Bain plan.
The Lighthouse plan envisages an injection of working capital in GBSC and the gradual sale of the company’s fleet of 11 post-panamax bulkers, a capesize and four product tankers over a 10-year period. This would ensure creditors a recovery of at least 60% of their money, about twice as much as the Bottiglieri/Bain bid, according to the joint venture’s estimates. During that time, the vessels would be managed by entities affiliated to Lighthouse, which “have a historical track record of being best-in-class operators achieving very low operating costs for their vessels under management”.
Competition from Lighthouse led Bottiglieri and Bain to sweeten their offer last month, increasing total receivables to the banks to $205m from $166m in their initial proposal, Lighthouse said. But this was “still lower than the market value of the assets and at around 50% of the total outstanding debt”.
Dismissing the Lighthouse plan last month, Bottiglieri said it involved “no upfront cash recovery, but only a 10-year postponement of debt maturities and empty future promises”.
Lighthouse countered by arguing that any debt repayments under the Bottiglieri/Bain plan, additional to an immediate cash injection of $120m, would be made only after GBSC produces a generous annual return of 15% of that amount from operating the ships.
