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Peter G in the driver’s seat
Incumbent chairman, CEO and CFO of General Maritime Corp avoid the axe as backer Oaktree Capital installs 'new' regime.
Top breached loan
Top Ships warns it may be forced to sell vessels or tap the money market if it breaches further loan agreements.
Top Ships boss, Evangelos Pistiolis.
Nasdaq-listed Top broke the covenants of one loan last year and is offering no guarantees about the security of others due to the present dire market conditions.
But new Top finance chief, Alexandros Tsirikos, tells TradeWinds there is no need to panic as he expects such warnings will become standard practice for shipping companies going forward.
In its third quarter report Top said: “As of 31 December 2007, the company was not in compliance with one of its financial covenants, but has obtained waivers up to and including 31 December 2008.
“No assurance can be given with respect to future compliance with covenants.”
Top adds if it breaches debt covenants or derivatives agreements and is unable to secure further waivers banks may step in and seize assets.
If this happens, “there can be no assurance that the company will be able to continue as a going concern,” it said.
Top added: “The current significant decline in charter rates in the shipping market coupled with the prevailing difficulty in obtaining financing for vessel purchases has adversely affected vessel values.
“A continuation of these conditions would lead to a significant decline in the fair market values of company's vessels, which may result in company's not being in compliance with these loan covenants.”
If waivers or refinancing can’t be arranged, Top would “have to sell vessels and or seek to raise additional capital in the equity markets,” it said.
Tsirikos is dismissive of the warning, stressing it is simply a sign of the times.
He said: “This sort of warning will become standard for shipping companies in the coming quarters due to events in both the sale and purchase and charter markets.”
Top posted a profit of $41.64m in the quarter, compared to a loss of $21.98m in the corresponding period a year ago.
Tsirikos added: “Overall we are happy. Compared to other companies we are in good shape.”
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