Jinhui Shipping and Transportation has announced that it – and 25 wholly-owned subsidiaries – has reached agreements with four major lenders to reschedule vessel mortgage loans.
A relevant announcement reads:
Jinhui Shipping and Transportation Limited (the “Company”) is pleased to announce that an intercreditor deed (the “ICD”) between the Company (as corporate guarantor), twenty five wholly – owned subsidiaries as borrowers of relevant vessel mortgage loans (the Borrowers”) and four major lenders (as lenders of relevant vessel mortgage loans) (collectively, the “Parties”) was executed on 8 December 2016 and the effective date took place on 28 December 2016 after the conditions precedent had been fulfilled.
Pursuant to the terms of the ICD, among others, the Parties agreed that the Borrowers shall pay 50% of each repayment installment during the forbearance period until 31 December 2018 (with early restructuring exit option ) and the remaining 50% of each such installment be deferred and repaid within two business day s after the end of the forbearance period in 2019 .
Any asset coverage ratio covenant and financial covenant as set out in the relevant loan facilities are waived and suspended, among others , during the forbearance period. The Borrowers are not required to provide additional securities under the ICD, but h ave agreed on cross – collateralization over the mortgaged vessels among each lender. The Borrowers shall pay an increased margin of 0.75 % per annum during the forbearance period and 0.5% per annum after the forbearance period as long as any amount is outstanding under the relevant loan facilities.
The rescheduling of indebtedness would allow the Group to preserve liquidity and financial resources to weather the unprecedented storm in dry bulk shipping market. As announced on 30 November 2016, the Group’s unaudited vessel mortgage loans as of 30 September 2016 were US$264,192,000, whereas the current portion and non – current portion of vessel mortgage loans accounted for 41% and 59% respectively.
With the effect of the ICD, the current portion and non – current portion of the Group ’ s vessel mortgage loans as of 30 September 2016 would have been changing to 2 4 % and 7 6 % respectively. This would maximize our liquidity position and relax our debt obligations during these extraordinary challenging times.
We would like to extend our sincere and heartfelt appreciation to all our lenders who have all been extending trust, confidence and support to the Company.