Horizon Lines Completes Mandatory Debt Conversion

press release
Thursday, January 12, 2012

$49.7 Million of 6.00% Series B Mandatorily Convertible Senior Secured Notes Exchanged for Common Stock and Warrants.

 

Horizon Lines, Inc. has announced that it has completed the mandatory debt-to-equity conversion of approximately $49.7 million of the company's 6.00% Series B Mandatorily Convertible Senior Secured Notes (the "Series B Notes").  The mandatory conversion reduces debt, lowers annualized interest payments and is expected to increase the value of the company's shares outstanding.  Under the terms of the company's recapitalization plan that was undertaken in October 2011, the Series B Notes are mandatorily convertible into shares of common stock or warrants in two equal installments on the three-month and nine-month anniversaries of their issuance, subject to certain conditions. 

 

In accordance with these terms, on January 10, 2012, the company mandatorily converted approximately $49.7 million of the Series B Notes at a conversion rate of 54.7196 shares of common stock (reflecting the 1-for-25 reverse stock split of the company's common stock effective December 7, 2011) per $1,000 principal amount of Series B Notes.  Approximately $18.5 million of the Series B Notes were converted into 1,014,839 shares of common stock with the remainder being converted into warrants exercisable into shares of common stock.  The distribution of common stock and warrants was based upon the U.S. citizenship verifications of the holders of the Series B Notes. Foreign holders, or holders who did not provide proof of U.S. citizenship, received warrants exercisable by U.S. citizens into an applicable quantity of common stock.  All fractional interests were paid in cash.

 

"This mandatory conversion reduces the company's annualized interest payments by approximately $3.0 million and represents a major step in deleveraging the company's balance sheet under the opportunities provided by our new capital structure," said Stephen H. Fraser, President and Chief Executive Officer.  "Affording us the ability to decrease debt is an essential component of the refinancing structure that we put in place last October with the help of our note holders. Issuing stock as a means to replace debt also allows us to immediately increase the total market value of our equity, as well as build shareholder value over time."

 

Subject to certain conditions, the remaining approximately $49.7 million in aggregate principal amount of the Series B Notes is scheduled to be mandatorily converted into shares of common stock and warrants in July 2012. The Series B Notes will be automatically converted into 6.00% Series A Convertible Senior Secured Notes due 2017 on October 5, 2012 if the company is unable to effect mandatory conversion before then.

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

DNV-GL Approves Kongsberg Engine Room Simulators

Kongsberg Maritime has received DNV-GL certification for three of its latest engine room simulator models designed to provide in-depth training on the K-Sim Engine simulator platform.

Container Shipping Lucky to Break Even in 2015

A toxic mixture of overcapacity, weak demand and aggressive commercial pricing is threatening liner shipping industry profitability for the rest of 2015, according

CMA CGM's OPDR Acquisition Approved by EU

The CMA CGM Group announced that the European Commission has approved its acquisition of OPDR. In order to finalize the acquisition, which was announced on November 25, 2014 by Jacques R.

Legal

Migrant Sailboat Sinks in Aegean, 17 Missing

A sailboat carrying migrants sank in in the Aegean sea between Turkey and Greece on Tuesday and at least 17 people were missing, Greek authorities said. Greece's

APL’s Schedule Reliability Scales Up

APL was the most reliable carrier with a global on-time performance of 85.5% in May 2015, according to the latest Global Liner Performance Report by SeaIntel Maritime Analysis.

Gazprom, Gasunie Sign Framework Agreement - LNG

At a Meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Han Fennema, CEO and Chairman of the Executive Board of Gasunie a Framework

Finance

Greece Port Operations Update

An update on Greece’s port operations and local conditions was issued today by maritime services provider Inchcape Shipping Services (ISS).   According to ISS,

Container Shipping Lucky to Break Even in 2015

A toxic mixture of overcapacity, weak demand and aggressive commercial pricing is threatening liner shipping industry profitability for the rest of 2015, according

Dry Bulk Market Crisis: Opportunity or Threat?

The shipping industry is experiencing the biggest dry bulk market recession since the 1980s, as uncertain global economic outlook and increased imbalance between

Container Ships

Container Shipping Lucky to Break Even in 2015

A toxic mixture of overcapacity, weak demand and aggressive commercial pricing is threatening liner shipping industry profitability for the rest of 2015, according

CMA CGM's OPDR Acquisition Approved by EU

The CMA CGM Group announced that the European Commission has approved its acquisition of OPDR. In order to finalize the acquisition, which was announced on November 25, 2014 by Jacques R.

First Gas Turbine-powered LNG Carrier Granted AIP

Hyundai Heavy Industries (HHI) announced it has jointly developed world’s first gas turbine-powered 174,000 m3 LNG carrier with GE Aviation and Marine and has secured

 
 
Maritime Standards Navigation Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1711 sec (6 req/sec)