Boxship and bulker owner Borealis Finance has won majority bondholder approval for its redrawn refinancing plans to preserve liquidity in the coronavirus slowdown.
The London-based company has the support of more than 67% of holders and has set a deadline of 13 July for others to accept new terms.
The company had called off a bondholder meeting earlier this month as talks continued with some investors.
It had been seeking an 18-month extension of maturity for its $200m issue, supported by a cash injection of $8m from its private equity majority owner KKR.
But this has now been cut to a year's extension and new equity of $18m after negotiations.
Financial covenants will be waived or adjusted until 31 December 2021 and Borealis will be allowed to use up to $12m from the sale of two vessels for general corporate purposes.
Charter rates plunge
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 $8m.
Average charter rates for Borealis' vessels have plunged 30% since December, and ship values are under pressure.
The company admitted this will "severely impact" its liquidity and financial position.
The shipowner is in the same boat as rivals MPC Container Ships and Songa Container, which are refinancing in the slump.
Liquidity restrictions eased
Its bonds will now fall due in November 2023, with payments made every six months, not at the end.
The requirement for minimum liquidity has been reduced to $7.5m instead of 5% of its debt.
Bondholders will receive a 0.25% acceptance fee, or 0.5% for "early bird" voters.
As of the end of May, Borealis was compliant with its financial covenants, having liquidity of $13.9m and a loan-to-value ratio of 68.7%.
KKR has committed a total of $650m of equity to the group since 2013, and the new equity from KKR highlights its continued support, Borealis said.
The deal fixes its "near-term liquidity challenge".
Dry-dockings delayed
The outfit has also "proactively engaged" with classification societies and successfully arranged for dry-dock extensions for a number of vessels.
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 $960,000, compared with $5.25m in 2019, as revenue grew to $23m from $20m.
Borealis also announced a series of new boxship charters after the end of the first quarter.
Seven vessels ranging in size from 2,556 teu to 4,255 teu have been booked for terms of between a month and until next March, at rates of $8,000 to $12,000 per day.
