Ship Finance International Limited (SFL) has sold its holding of notes and warrants in Horizon Lines, Inc. for net cash proceeds of approximately $72 million.
In April 2012, Ship Finance received $40 million of Horizon Lines second-lien notes and 9.25 million warrants in Horizon Lines in connection with a termination of the charters for five container vessels.
Thereafter, the second-lien notes have accumulated interest on a non-cash basis at a rate of 15 percent annually.
In November 2014, Horizon Lines announced a merger with Matson Navigation Company, Inc., subject only to regulatory approval of a sale of Horizon Lines' Hawaii assets to The Pasha Group.
On May 29, 2015, the parties announced the successful completion of the transaction, and Matson has paid $0.72 per warrant and the second-lien notes have been redeemed at a premium.
Ship Finance has conservatively recorded the notes on our balance sheet at 40 percent of par value, and the book gain is estimated to approximately $45 million, to be recorded in the second quarter. The cash proceeds from the notes and warrants are expected to be reinvested in new assets.