Genmar rolls the dice

General Maritime Corp (Genmar) could emerge from bankruptcy by as early as April if a bankruptcy court and creditors sign off on its Chapter 11 restructuring plan.

Peter Georgiopoulos.

The preliminary plan, which was filed today, would give investor Oaktree Capital 50% of the reorganised company’s equity in exchange for $175m while unsecured creditors would be given an opportunity to pick up $61.5m worth of shares by way of a rights offering.

In addition, the proposal seeks the elimination of $600m in debt, a figure that includes cash owed to Oaktree, banks and bondholders, and a $75m reduction in debt tied to credit facilities, sources familiar with the plan explained when contacted by TradeWinds today.

Legal sources say Genmar will likely face objections from noteholders despite the offer to pick up a 17.5% slice of the restructured company, which admits that discussions with the creditors’ committee are still ongoing.

As TradeWinds has reported, Oaktree coughed up $200m to secure a 19.9% slice of the owner in May 2011 when it was still quoted in New York and came to the rescue again during the Chapter 11 process with the pledge for an additional $175m.

When the company filed for bankruptcy protection in November, the holders of Genmar’s 12% senior notes due 2017 were collectively listed as its top creditor with a claim of $300m.

Led by industry legend Peter Georgiopoulos, Genmar was established as Maritime Equity Management in 1991 with an initial public offering coming a decade later.

A merger with Arlington Tankers in 2009 and the acquisition of Metrostar Tankers in 2010 substantially boosted the fleet but also debt levels.

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