Court Confirms TBS International Plan of Reorganization
DUBLIN, IRELAND, Mar 28, 2012 (Menafn - MARKETWIRE via COMTEX) --
--Overwhelming support by all lender groups signals vote of confidence
--Paves way for expedited emergence from chapter 11
--New liquidity of approximately 40.0 million provided by existing
--Debt will be reduced by over 100 million since September 30, 2011
--All vendors to be paid in cash for 100% of allowed claims
--Considerable flexibility to employ long and short term charters to
meet almost any customer need
TBS International plc (pinksheets:TBIQ) today announced that the U.S.Bankruptcy Court for the Southern District of New York has confirmedthe Company's Plan of Reorganization, paving the way for thereorganized Company's expedited emergence from chapter 11proceedings, less than 60 days after its February 6 filing. The Planreflects overwhelming support from its voting lenders to restructurethe Company's secured debt and to pay in full in cash all allowedclaims of unsecured creditors, including all vendors. As a result,the reorganized Company will emerge from its pre-packagedrestructuring with a healthy capital structure, includingapproximately 40.0 million in new money financing provided by itsexisting lenders, which will provide ample liquidity for the Companyand enable the Company to maintain its position as a market leader inthe shipping industry.
"We are very pleased with this extraordinary vote of confidence inour long term sustainability provided by our lenders," said Joseph E.Royce, Chairman, Chief Executive Officer and President. "We lookforward to renewing our focus on growing and managing our business.As a result of this restructuring, our company will be positioned tosuccessfully compete in our global markets."
At emergence, the reorganized Company will have reduced its debt byover 100 million since September 30, 2011. Under the Plan, theDebtor-in-Possession financing claims and pre-petition secured debtwill be restructured so as to provide new liquidity, extendedmaturity dates, and other terms that are expected to ensure theCompany's future viability.
Most importantly, the Company has always and continues to becommitted to its customers and vendors. The Company will haveconsiderable flexibility to acquire strategic long and short termcharters, which will enable it to meet a wide variety of customerneeds going forward. In addition, all trade vendors will be paid infull in cash for all allowed claims. In fact, the vast majority ofthe Company's vendors have already been paid for all amounts due andcontinue to maintain positive business relations with TBS. Uponemergence from chapter 11, the Company will have eliminated anypossibility of valid vessel arrest due to the bankruptcy process.
Gregg McNelis, Senior Executive Vice President and Chief OperatingOfficer, remarked on the loyalty of key clients throughout therestructuring process. "TBS has always put our customers first, andwe have deeply appreciated their continued support as we worked withour lenders to restructure our bank facilities in the currentdifficult operating environment. TBS is now positioned to competeeven more strongly and to meet all of our customers' shippinglogistics needs."
Pursuant to the Plan, ownership of the Company's operatingsubsidiaries will be transferred to a newly-formed entity that willbe owned principally by the Company's lenders. The Company's currentequity holders will receive no distributions under the Plan, and theCompany will cease to be a reporting public company.
Information about the restructuring is available at the Company'swebsite, www.tbsship.com or via the Company's restructuringinformation line at (888) 418-5566 or (216) 370-3528 (from outsidethe U.S.).
TBS provides worldwide shipping solutions to a diverse client base ofindustrial shippers through its Five Star Service: oceantransportation, projects, operations, port services and strategicplanning. The TBS shipping network operates liner, parcel and drybulk services, supported by a fleet of multipurpose tweendeckers andhandysize/handymax bulk carriers. TBS has developed its franchisearound key trade routes between Latin America and China, Japan andSouth Korea, as well as select ports in North America, Africa, theCaribbean and the Middle East. Visit our website at www.tbsship.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains various forward-looking statements andinformation that are based on management's beliefs, as well asassumptions made by and information currently available tomanagement. These forward-looking statements speak only as of thedate of this press release. The Company disclaims any obligation toupdate these statements and cautions you not to rely unduly on them.Forward-looking information includes, but is not limited to, thecompletion of the Company's restructuring including the outcome andeffects on its business of the proceedings under Chapter 11 of theBankruptcy Code, and the ability of the Company to satisfy closingconditions under the agreements-in-principle and the plan ofreorganization. Although the Company believes that the expectationsreflected in such forward-looking statements are reasonable, itcannot provide any assurance that those expectations will prove tohave been correct. Such statements are subject to certain risks,uncertainties and assumptions, including, among other matters: Theeffects of severe and rapid declines in industry conditions that haverequired the Company to restructure its outstanding indebtedness, theability to manage and repay its substantial indebtedness, the abilityto maintain financial ratios and comply with the financial covenantsin its credit facilities, the ability to continue to operate as agoing concern, the ability to effectively operate its business andmanage its growth while complying with operating covenants in itscredit facilities, the ability to generate the significant amounts ofcash necessary to service its debt obligations, the very highvolatility in the Company's revenues and costs, including volatilitycaused by increasing oil prices, excess supplies of dry bulk vesselsin all classes and the resulting heavy pressure on freight rates,adverse weather conditions that may significantly decrease the volumeof many dry bulk cargoes, the stability and continued growth of theAsian and Latin American economies and rising inflation in China, theCompany's vessels exceeding their economic useful lives and the riskassociated with operating older vessels, the Company's ability togrow its vessel fleet and effectively manage its growth, impairmentsof the Company's long-lived assets, compliance with both new andexisting environmental laws and regulations, and other factors listedfrom time to time in our filings with the Securities and ExchangeCommission. Should one or more of these risks materialize, or shouldunderlying assumptions prove incorrect, actual results may varymaterially from those expected. These risks, as well as others, arediscussed in greater detail in TBS International's filings with theSecurities and Exchange Commission, including TBS International'sAnnual Report on Form 10-K for the year ended December 31, 2010 andits subsequently filed Quarterly Reports on Form 10-Q.
For more information, please contact:
Ferdinand V. Lepere
Senior Executive Vice President and Chief Financial Officer
TBS International plc
Investor Relations / Media:
Capital Link, Inc. New York
SOURCE: TBS International plc
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