November 6, 2018
On Sunday, November 4, 2018, we wrote the following in our “Fast Forward” segment:
Aegean Marine Petroleum Network Inc. ($ANW) is now subject to a fraud probe by international auditors. This thing will be in a bankruptcy court near you before too long.
We didn’t expect that prediction to come to fruition so quickly!
Admittedly, Aegean, one of the world’s largest independent marine fuel logistics companies with 57 owned and chartered vessels, has been a slow moving train towards bankruptcy for some time. The recent revelation of fraud — yes, fraud — is just the cherry on top. (PETITION Note: in frothy times come desperate shenanigans. This won’t be the last bankruptcy filed in the near-term that, in part, will have an element of fraud in the story.) And, alas, earlier, Aegean Marine Petroleum Network Inc. and 74 affiliated debtors filed for bankruptcy in the Southern District of New York. The more immediate trigger? The maturity of its 4% convertible unsecured notes.
Aegean blames an over-saturated market, limitations imposed by its lenders under the credit facilities, and…wait for it…the fraud…as reasons for its bankruptcy filing. Wait. Why are we describing the debtors’ ails in words when they’ve provided us with some crafty graphics to illustrate, in part, the “perfect storm of circumstances” that have plagued them:
Aegean intends to use the bankruptcy process to address its capital structure (namely the maturity), stabilize operations and sell to Mercuria Energy Group Limited, a private company that, back in August, became the sole lender under both the debtors’ US and Global credit facilities. Mercuria also provided a DIP proposal that consists of a $160mm US credit facility, a $300mm global credit facility, and a $72mm term loan that the debtors deemed better than a proposed facility from an ad hoc group of unsecured convertible noteholders. The question will be to what degree a more robust and competitive sale process emerges now that this thing is finally in bankruptcy court.
Jurisdiction: S.D.N.Y. (Judge Wiles)
Capital Structure: $131.7mm US credit facility (ABN AMRO Bank NV), $249.6mm global credit facility (ABN AMRO Bank NV), $206.6mm aggregated across ten secured term loans, $172.5mm 4.25% convertible unsecured notes due 2021 (U.S. Bank NA), $94.55mm 4.00% convertible unsecured notes due 2018 (Deutsche Bank Trust Company Americas)
Legal: Kirkland & Ellis LLP (James Sprayragen, Jonathan Henes, Marc Kieselstein, Ross Kwasteniet, Cristine Pirro Schwarzman, Adam Paul, Benjamin Winger, Christopher Hayes, Bryan Uelk)
Independent Directors: Donald Moore, Raymond Bartoszek, Tyler Baron)
Audit Committee of the Board of Directors
Legal: Arnold & Porter Kaye Scholer LLP (Tyler Nurnberg)
Financial Advisor: EY Turnaround Management Services LLC (Andrew Hede)
Investment Banker: Moelis & Company LLC (Zul Jamal)
Claims Agent: Epiq Corporate Restructuring LLC (*click on company name above for free docket access)
Other Parties in Interest:
Prepetition Agent: ABN AMRO Capital USA LLC
Legal: Willkie Farr & Gallagher LLP (Ana Alfonso)
Prepetition Agent: Aegean Baltic Bank SA
Legal: White & Case LLP (Scott Greissman, Elizabeth Feld, Mark Franke)
Indenture Trustee for the 4% ‘18 Convertible Senior Notes
Legal: Ropes & Gray LLP (Mark Somerstein, Patricia Chen)
Largest Equity Holder/Stalking Horse Buyer: Mercuria Energy Group Limited
Legal: Norton Rose Fulbright US LLP (Marc Ashley, Robert Kirby)
Official Committee of Unsecured Creditors (Deutsche Bank Trust Company Americas, U.S. Bank National Association, American Express Travel Related Services Company Inc.)
Legal: Akin Gump Strauss Hauer & Feld LLP (Ira Dizengoff, Philip Dublin, Kevin Zuzolo)
Financial Advisor: AlixPartners LLP