Citibank to release arrested Toisa tanker

Bankrupt shipowner gets back vessel to help fund debt obligations to bank.

Toisa won a motion Wednesday seeking to release a products tanker arrested by Citibank and free up cash collateral in order to cover the vessel's expenses.

The Gregory Callimanopulos-led shipowner filed a motion in US bankruptcy court to use cash collateral in which Citibank has a lien. The motion also asks for the release from arrest of the 113,000-dwt United Journey (built 2010).

Toisa is the guarantor on some $102m in debt backed by the United Journey and the 110,000-dwt United Seas (built 2008).

The filing says Citibank agreed to the United Journey's release provided that Toisa file a monthly report containing an updated four week budget, an expense report for the month and a variance report.

Toisa would be allowed to use Citibank’s cash collateral to fund certain tanker operating expenses, capital expenditures, drydocking expenses and drydocking reserve amounts. The ship was earning $15,000 per day at the time of its arrest.

Citibank would also receive first priority interests and liens on property and assets related to the two ships.In addition, Citibank would receive the monthly interest payments due on the debt.