February 1, 2019
Dutch-based non-operating single-purpose-entity, Arpeni Pratama Ocean Line Investment B.V., filed a prepackaged bankruptcy case in the Southern District of New York to effectuate a restructuring of its $141mm Floating Rate Guaranteed Secured Notes due 2021 (HSBC Bank USA NA, as agent), the issuance of which is the legal entity's sole reason to exist. The Debtor's plan sponsor, PT Arpeni Pratama Ocean Line Tbk, is the owner and operator of a fleet of Indonesian flagged dry bulk vessels and a guarantor of the debt. It operates 14 wholly-owned and 2 chartered vessles, the use of which is to provide coal transportation and jetty management services to one of Indonesia's largest power plants.
Why is this company in bankruptcy? Per the Company:
"...the Debtor is a single purpose entity created for the purpose of issuing the Senior Secured Notes. Accordingly, the Debtor is wholly dependent on its parent company, the Plan Sponsor, to generate sufficient revenues so as to permit for the repayment of the Senior Secured Notes. The Plan Sponsor, who derives substantially all of its revenues its drybulk shipping operations, has operated in an increasingly challenging market since the financial crisis of 2008 where operational costs have continued to increase and revenues for drybulk shipping have remained at historic lows. These factors, coupled with increasing competition from smaller and less leveraged drybulk shippers, has made it more difficult for the Plan Sponsor to service its existing indebtedness, including the Senior Secured Notes."
Accordingly, the Debtor and the Plan Sponsor have agreed to equitize substantially all of the Debtor's and the Plan Sponsor's indebtedness "to permit the Plan Sponsor to position itself on a more level landscape to its competitors to better prepare itself to weather the continuing uncertainty in the shipping industry." Pursuant to the Plan, holders of the notes will receive common shares in the Plan Sponsor, warrants, and a small cash payment.
Jurisdiction: S.D.N.Y. (Judge Bernstein)
Legal: Paul Hastings LLP (Pedro Jimenez)
Financial Advisor: Fulcrum Partners Asia
Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
Other Parties in Interest: