Rickmers will file if it loses bondholder vote

German owner warns it will be liquidated if refinancing plan is rejected on 1 June.

Struggling German owner Rickmers Holdings has warned bondholders it will file for insolvency if they reject its financial restructuring.

Investors will vote on 1 June for a deal that would save the company.

But should the company fail in pushing the plan through, it said it will "immediately file for insolvency" to avoid prosecution, because its going concern prognosis would "likely lapse."

This would lead to liquidation and the sale of all its ships.

A worst case scenario would see unsecured creditors recovering only 2.3% of their cash if the company collapsed.

On Wednesday, German lender Schnigge Wertpapierhandelsbank made an offer for some of Rickmers Holding's bond in a move that could help win the vote.

The Bertram Rickmers company's bond representative Raschke said the Dusseldorf bank is offering to buy up to EUR 30m ($33.32m) of the EUR 275m five-year 8.875% issue due in 2018.

Crucially, Raschke believes that Schnigge supports the company's refinancing and it is likely that its ownership of the bonds will give Rickmers the required level of attendance - 25% - at the meeting.

Two previous attempts at a vote failed to reach a quorum of investors.

Last month, Rickmers said it had reached a deal with lenders over its financial liabilities, subject to creditor approvals and restructuring of the bond.

Sole shareholder Bertam Rickmers agreed to reduce his 100% shareholding to 24.9%, with HSH Nordbank, bondholders and potentially another lender having 75.1%.

Rickmers himself will pump in EUR 10m in cash to relieve the group from a shipyard liability of $10m.

He will also waive licensing fees up to the end of the first quarter of 2021 and procure a back-up loan facility of up to EUR 10m for possible future liquidity requirements.

The Hamburg-based group has 114 ships, mostly container vessels, but also including car carriers, bulkers and heavy-lifters.

Rickmers also said this week that it was finalising a deal with UniCredit Bank to extend four loans due in 2018 and 2021, reduce interest and sell two ships to repay two further loans.

In addition, Deutsche bank has proposed not charging Rickmers the difference between its outstanding ship finance loans and the proceeds from selling the two vessels they are secured against.