NewLead strikes debt deal

Greek bulker and tanker owner NewLead Holdings has turned a $44.82m debt into new shares for a private equity fund.
Michael Zolotas, CEO of NewLead.

Michael Zolotas, CEO of NewLead.

The US-listed company said New York’s supreme court approved a deal that will see Magna Group affiliate MG Partners (MPG) of Gibraltar take a 9.92% stake.

The deal arose from a claim made in November by Magna-linked Hanover Holdings, which had hoovered up the debt from a range of creditors including Bureau Veritas, DNB, Hamworthy, Jotun and Zhoushan Xinya Shipyard.

Its 50%-owned MGP unit will receive 1.75m NewLead shares following the owner’s lastest stock split.

A NewLead filing to the Securities and Exchange Commission revealed it was unable to pay the debt.

Hanover was also involved in a recent debt deal with Greek bulker owner FreeSeas.

In November, NewLead announced plans to cure a compliance issue by way of yet another reverse stock split.

It intends to turn three common shares into one during an exercise that will see the total outstanding reduced to 15,887,878 from 47,663,633 by 6 December.

In October, NewLead launched a 1-for-15 reverse split that saw the total of common shares outstanding reduced from 700,542,019  to approximately 46,702,802. In 2012, it planned to pursue the same exercise with a different ratio but ended up pulling the plug.

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