Ultrapetrol files for Chapter 11 protection

April 2017  |  DEALFRONT  |  BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

April 2017 Issue

April 2017 Issue


Ultrapetrol (Bahamas) Limited, owner of one of the largest shipping businesses in South America, announced that it, and a number of its subsidiaries, have commenced voluntary cases under Chapter 11 of the US Bankruptcy Code.

To implement a comprehensive debt restructuring, Ultrapetrol and its subsidiaries have negotiated and received affirmative votes from all voting lenders and from 99.9 percent of the company’s bonds voting to accept a prepackaged Chapter 11 plan of reorganisation that was filed with the US Bankruptcy Court for the Southern District of New York. The cases are pending before Judge Robert D. Drain.

With the full support of its lenders and bondholders, Ultrapetrol has requested a prompt combined hearing to approve the disclosure statement for the reorganisation plan and to confirm the plan itself. As proposed, the plan will restructure Ultrapetrol’s and its subsidiaries’ secured debt and pay in full allowed claims of unsecured creditors. This will allow the company to improve its balance sheet, with the goal of returning to overall profitability in light of current and expected demand in the shipping markets.

Furthermore, according to the plan, creditors holding in excess of $290.1m are to receive approximately $84m in cash in full settlement of their indebtedness. In addition, none of Ultrapetrol’s equity holders will receive any distributions.

“We are very pleased to have received consent from all of our lenders and most of our bondholders to go forward with the prepackaged Chapter 11 plan,” said Eduardo Ojea Quintana, chairman and chief executive of Ultrapetrol. “The prepackaged Chapter 11 plan is the result of more than 18 months of negotiations with lenders and bondholders, and we believe it will leave our river business and offshore business able to strongly compete in our markets.”

Throughout the duration of the Chapter 11 process, Ultrapetrol and its subsidiaries are taking actions to ensure that the filing does not affect their operations, which are expected to continue on an uninterrupted basis. Customary relief has been sought with respect to, among other things, payment of balances owed to non-US vendors and the continuation of employee insurance, wage and benefit programmes.

“We have taken steps to diminish the impact of this process on our vendors, customers and employees, and we intend to move forward as expeditiously as possible to complete the restructuring,” said Mr Quintana. “Our vessels will continue to operate as scheduled.”

An industrial transportation company serving the marine transportation needs of its clients in the markets on which it focuses, Ultrapetrol provides shipping markets with containers, grain and soy bean products, forest products, minerals, crude oil, petroleum and refined petroleum products, as well as the offshore oil platform supply market with its extensive and diverse fleet of vessels. These include river barges and push boats, platform supply vessels, tankers and two container feeder vessels.

As it proceeds with its plan of reorganisation and restructuring, Ultrapetrol is being advised by the investment banking firm of Miller Buckfire & Co. and is receiving financial advice from AlixPartners, LLP. In addition, Zirinsky Law Partners PLLC and Seward & Kissel LLP are acting as legal counsel to Ultrapetrol during the Chapter 11 process.

Anticipating business as usual, Ultrapetrol and its subsidiaries will meet all obligations that arise during the Chapter 11 restructuring – a process which Ultrapetrol expects to emerge from expeditiously.

© Financier Worldwide


BY

Fraser Tennant


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