INTERNATIONAL SHIPHOLDING CORPORATION (OTCMKTS:ISHCO) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
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Entry into a Material Definitive Agreement.
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As previously reported by International Shipholding Corporation
(the Company), on July 31, 2016, the Company and certain of its
direct and indirect subsidiaries (together with the Company, the
Debtors) filed voluntary petitions for relief under Chapter 11 of
Title 11 of the U.S. Code (the Bankruptcy Code) in the United
States Bankruptcy Court for the Southern District of New York
(the Bankruptcy Court).
(the Company), on July 31, 2016, the Company and certain of its
direct and indirect subsidiaries (together with the Company, the
Debtors) filed voluntary petitions for relief under Chapter 11 of
Title 11 of the U.S. Code (the Bankruptcy Code) in the United
States Bankruptcy Court for the Southern District of New York
(the Bankruptcy Court).
Asset Purchase Agreement
As previously reported by the Company, on October 28, 2016, the
Company and certain of its subsidiaries (the Sellers) entered
into a stalking horse Asset Purchase Agreement with J Line
Corporation, a Marshall Islands corporation (the Stalking Horse
Buyer), to which the Stalking Horse Buyer agreed to purchase
certain contracts, agreements, and notes receivable financing
certain vessels owned by third parties relating to the Companys
provision of logistical and seaborne transportation services in
Southeast Asia (the Specialty Business Assets) from the Sellers
for $18.0 million, subject to adjustments for certain expenses.
Company and certain of its subsidiaries (the Sellers) entered
into a stalking horse Asset Purchase Agreement with J Line
Corporation, a Marshall Islands corporation (the Stalking Horse
Buyer), to which the Stalking Horse Buyer agreed to purchase
certain contracts, agreements, and notes receivable financing
certain vessels owned by third parties relating to the Companys
provision of logistical and seaborne transportation services in
Southeast Asia (the Specialty Business Assets) from the Sellers
for $18.0 million, subject to adjustments for certain expenses.
On December 15, 2016, the Debtors conducted an auction with
respect to the Specialty Assets Business in accordance with the
bidding procedures approved by the Bankruptcy Court, and the
Stalking Horse Buyer was the successful bidder in the auction. On
December 30, 2016, the Bankruptcy Court entered a sale order
approving the sale of the Specialty Business Assets to the
Stalking Horse Buyer at the auction in accordance with Section
363(f) of the Bankruptcy Code.
respect to the Specialty Assets Business in accordance with the
bidding procedures approved by the Bankruptcy Court, and the
Stalking Horse Buyer was the successful bidder in the auction. On
December 30, 2016, the Bankruptcy Court entered a sale order
approving the sale of the Specialty Business Assets to the
Stalking Horse Buyer at the auction in accordance with Section
363(f) of the Bankruptcy Code.
On January 18, 2017, the Sellers entered into an amended Asset
Purchase Agreement (the Asset Purchase Agreement) to which the
Stalking Horse Buyer, together with SeaOcean Carriers PTE Ltd., a
Singapore private limited company, and Arcadia Marine, L.L.C., a
Louisiana limited liability company (collectively, the Buyers),
agreed to purchase the Specialty Business Assets from the Sellers
for an increased purchase price of $24.5 million. The Sellers and
the Buyers made customary representations, warranties and
covenants in the Asset Purchase Agreement. The closing of the
transactions contemplated by the Asset Purchase Agreement was
subject to the satisfaction or waiver of customary closing
conditions.
Purchase Agreement (the Asset Purchase Agreement) to which the
Stalking Horse Buyer, together with SeaOcean Carriers PTE Ltd., a
Singapore private limited company, and Arcadia Marine, L.L.C., a
Louisiana limited liability company (collectively, the Buyers),
agreed to purchase the Specialty Business Assets from the Sellers
for an increased purchase price of $24.5 million. The Sellers and
the Buyers made customary representations, warranties and
covenants in the Asset Purchase Agreement. The closing of the
transactions contemplated by the Asset Purchase Agreement was
subject to the satisfaction or waiver of customary closing
conditions.
Erik L. Johnsen, the Chairman of the Board, Chief Executive
Officer, and President of the Company, and R. Christian Johnsen,
the Secretary of the Company and the brother of Erik L. Johnsen,
and members of their family are officers and/or stockholders of
the Buyers.
Officer, and President of the Company, and R. Christian Johnsen,
the Secretary of the Company and the brother of Erik L. Johnsen,
and members of their family are officers and/or stockholders of
the Buyers.
The description of the Asset Purchase Agreement is qualified in
its entirety by reference to the full text of the Asset Purchase
Agreement, a copy of which is filed as Exhibit 2.1 to this
Current Report on Form 8-K and incorporated into this Item 1.01
by reference.
its entirety by reference to the full text of the Asset Purchase
Agreement, a copy of which is filed as Exhibit 2.1 to this
Current Report on Form 8-K and incorporated into this Item 1.01
by reference.
| Item 2.01. |
Completion of Acquisition or Disposition of Assets.
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The closing of the transactions contemplated by the Asset
Purchase Agreement occurred on January 18, 2017. The information
regarding the Asset Purchase Agreement set forth in Item 1.01 of
this Current Report on Form 8-K is incorporated by reference into
this Item 2.01.
Purchase Agreement occurred on January 18, 2017. The information
regarding the Asset Purchase Agreement set forth in Item 1.01 of
this Current Report on Form 8-K is incorporated by reference into
this Item 2.01.
| Item 7.01. |
Regulation FD Disclosure.
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Plan of Reorganization and Disclosure Statement
On January 13, 2017, the Debtors filed with the Bankruptcy
Court the solicitation versions of the First Amended Joint
Chapter 11 Plan of Reorganization for International Shipholding
Corporation and its Affiliated Debtors (the Plan of
Reorganization) and the accompanying Disclosure Statement for
First Amended Joint Chapter 11 Plan of Reorganization for
International Shipholding Corporation and its Affiliated
Debtors (the Disclosure Statement). The Bankruptcy Court has
scheduled a hearing for February 16, 2017 to consider
confirmation of the Plan of Reorganization.
Court the solicitation versions of the First Amended Joint
Chapter 11 Plan of Reorganization for International Shipholding
Corporation and its Affiliated Debtors (the Plan of
Reorganization) and the accompanying Disclosure Statement for
First Amended Joint Chapter 11 Plan of Reorganization for
International Shipholding Corporation and its Affiliated
Debtors (the Disclosure Statement). The Bankruptcy Court has
scheduled a hearing for February 16, 2017 to consider
confirmation of the Plan of Reorganization.
The classes and types of claims and interest in the Debtors are
described in the proposed Plan of Reorganization, and the terms
used below refer to the terms set forth in the Plan of
Reorganization. The proposed Plan of Reorganization generally
provides for the following:
described in the proposed Plan of Reorganization, and the terms
used below refer to the terms set forth in the Plan of
Reorganization. The proposed Plan of Reorganization generally
provides for the following:
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SEACOR Capital Corp. (SEACOR) will cause $25.0 million
of committed financing to be made available to the Debtors by one or more money center banks; |
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SEACOR will provide a capital infusion of $10.5 million
dollars (the Cash Consideration) in exchange for 35.6% of the ownership interests in the reorganized Company; |
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SEACOR will buy out any portion of the
Debtor-in-Possession Credit Agreement among Company and the other Debtors party thereto, as borrowers, SEACOR Capital Corp, as administrative agent, collateral agent, security trustee and a lender, and DVB BANK SE, as a lender (as amended, the DIP Credit Facility) funded by any other party, so that it is the sole beneficial owner of any DIP Credit Facility claims in exchange for 64.4% of the ownership interests in the reorganized Company; |
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holders of allowed claims on account of certain of the
Debtors fixed rate credit agreement with DVB Bank SE (the DVB Facility) will receive, at the option of the Debtors, with the consent of SEACOR or the reorganized Debtors, as applicable, in full and final satisfaction of such claims, either (i) a cash payment in the amount of $28,162,271.03, plus interest and any reasonable fees, costs, or charges provided for under the DVB Facility to the extent required under section 506(b) of the Bankruptcy Code, (ii) in the event of any disposition of the collateral securing such allowed DVB Facility claim, the proceeds generated by such disposition up to an amount sufficient to provide payment in full, subject only to claims secured by such collateral that are senior in priority to the allowed DVB Facility claims, or (iii) delivery of the collateral securing such allowed DVB Facility claim to the agent under the DVB Facility or its nominee; |
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holders of allowed claims on account of certain of the
Debtors credit agreement with Citizens Asset Finance will receive, at the option of the Debtors, with the consent of SEACOR or the applicable reorganized Debtor, as applicable, in full and final satisfaction of such claims, either (i) in the event of any disposition of the collateral securing such claims, the proceeds generated by such disposition or (ii) delivery of the collateral securing such claims to the holder of such claims; |
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holders of allowed claims on account of certain of
the Debtors variable rate financing agreement with Capital One N.A. will receive, at the option of the Debtors, with the consent of SEACOR or the applicable reorganized Debtor, as applicable, in full and final satisfaction of such claims, either (i) in the event of any disposition of the collateral securing such claims, the proceeds generated by such disposition or (ii) delivery of the collateral securing such claim to the holder of such claim; |
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holders of allowed claims on account of certain of
the Debtors senior secured credit facility with a syndicate of lenders led by Regions Bank (the Regions Facility) will receive their pro rata share of: |
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(i) the proceeds generated from the disposition or
collection of certain collateral under the Regions Facility or (ii) solely to the extent that all of such collateral has not been disposed of or collected, as applicable, prior to the effective date, a non-recourse note issued to Regions Bank, as agent, in the principal amount equal to $4.5 million minus the amount of proceeds realized and paid on account of such claim from the disposition or collection, as applicable, of such collateral, plus |
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cash in an amount necessary to satisfy the secured
Regions Facility claims in full after accounting for any distribution described above; |
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holders of Allowed Other Priority Claims will
receive, in full and final satisfaction of such claims, payment of such claims in full in cash unless the holders of such claims agree to an alternative treatment; |
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holders of Allowed Other Secured Claims will receive,
at the option of the applicable Debtor, with the consent of SEACOR or the applicable reorganized Debtor, as applicable, in full and final satisfaction of such claims, either (i) payment in full in cash, including interest, to the extent applicable or (ii) such other treatment as may be agreed to by the holders of such claim and the applicable reorganized Debtor; |
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holders of Allowed General Unsecured Claims against
LCI Shipholdings, Inc. will receive, in full and final satisfaction of such claims, their pro rata share of $2.55 million of cash; |
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holders of Allowed General Unsecured Claims against
each of Gulf South Shipping PTE LTD and Marco Shipping Company PTE LTD will receive, in full and final satisfaction of such claims, the remaining cash on hand on the applicable Debtors balance sheet prior to distribution of such cash to holders of interests in the applicable Debtor; |
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holders of Allowed General Unsecured Claims against
the Debtors other than LCI Shipholdings, Inc., Gulf South Shipping PTE LTD and Marco Shipping Company PTE LTD (the GUC Trust Debtors) will receive, in full and final satisfaction of such claims, their pro rata share of $3.0 million in cash; |
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there will be no distribution to holders of 510
Claims on account of such claims; |
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there will be no distribution to the holders of
intercompany claims on account of such claims, and such claims will be cancelled, reinstated, or modified, as determined by the Debtors in consultation with SEACOR, on the effective date of the Plan of Reorganization; |
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all current equity interests in the Company shall
be cancelled and existing equity holders will not receive a distribution on account of their equity interests; and |
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all intercompany interests shall be cancelled and
no distribution shall be made on account of such interests, unless all claims against such entity have been satisfied in full, in which case any remaining funds shall be distributed to the applicable holder of intercompany interests. |
The distributions to the holders of the Allowed General
Unsecured Claims described above reflect a settlement
reached between the unsecured creditors committee and the
Debtors with respect to the treatment of the Debtors
general unsecured creditors. As part of the settlement, the
unsecured creditors committee and the Debtors agreed to the
formation of a trust for the benefit of the holders of
Allowed Class 7 General Unsecured Claims of the GUC Trust
Debtors to be funded with $3.0 million of cash and certain
causes of action that will be transferred to the trust on
the effective date of the Plan of Reorganization. These
cash allocations to the holders of General Unsecured Claims
described above ensures that the holders of General
Unsecured Claims in each class would receive more than they
would in a Chapter 7 liquidation as set forth in the
liquidation analysis attached as an exhibit to the
Disclosure Statement. The settlement assumes that no
payments will be made to the holders of Intercompany
Claims.
Unsecured Claims described above reflect a settlement
reached between the unsecured creditors committee and the
Debtors with respect to the treatment of the Debtors
general unsecured creditors. As part of the settlement, the
unsecured creditors committee and the Debtors agreed to the
formation of a trust for the benefit of the holders of
Allowed Class 7 General Unsecured Claims of the GUC Trust
Debtors to be funded with $3.0 million of cash and certain
causes of action that will be transferred to the trust on
the effective date of the Plan of Reorganization. These
cash allocations to the holders of General Unsecured Claims
described above ensures that the holders of General
Unsecured Claims in each class would receive more than they
would in a Chapter 7 liquidation as set forth in the
liquidation analysis attached as an exhibit to the
Disclosure Statement. The settlement assumes that no
payments will be made to the holders of Intercompany
Claims.
Information contained in the proposed Plan of
Reorganization is subject to change, whether as a result of
amendments to the Plan of Reorganization, third-party
actions, or otherwise. The Plan of Reorganization is
subject to acceptance by certain of the Debtors creditors
(as and to the extent required under the Bankruptcy Code)
and confirmation by the Bankruptcy Court. There can be no
assurances that the creditors of the Debtors will accept
the proposed Plan of Reorganization or that the Bankruptcy
Court will confirm the Plan of Reorganization.
Reorganization is subject to change, whether as a result of
amendments to the Plan of Reorganization, third-party
actions, or otherwise. The Plan of Reorganization is
subject to acceptance by certain of the Debtors creditors
(as and to the extent required under the Bankruptcy Code)
and confirmation by the Bankruptcy Court. There can be no
assurances that the creditors of the Debtors will accept
the proposed Plan of Reorganization or that the Bankruptcy
Court will confirm the Plan of Reorganization.
The description of the Plan of Reorganization and the
Disclosure Statement is qualified in its entirety by
reference to the full text of the Plan of Reorganization
and Disclosure Statement, copies of which are attached as
Exhibit 99.1 and 99.2, respectively, to this Current Report
on Form 8-K and incorporated into this Item 7.01 by
reference.
Disclosure Statement is qualified in its entirety by
reference to the full text of the Plan of Reorganization
and Disclosure Statement, copies of which are attached as
Exhibit 99.1 and 99.2, respectively, to this Current Report
on Form 8-K and incorporated into this Item 7.01 by
reference.
Monthly Operating Report
On January 17, 2017, the Company filed a Monthly Operating
Report for the month of December 2016 with the Bankruptcy
Court. The Monthly Operating Report is furnished as Exhibit
99.3 to this Current Report on Form 8-K and incorporated
into this Item 7.01 by reference.
Report for the month of December 2016 with the Bankruptcy
Court. The Monthly Operating Report is furnished as Exhibit
99.3 to this Current Report on Form 8-K and incorporated
into this Item 7.01 by reference.
Cautionary Statement Regarding the Monthly Operating
Report
Report
The Company cautions investors and potential investors
not to place undue reliance on the information contained
in the Monthly Operating Report, which was not prepared
for the purpose of providing the basis for an investment
decision relating to any of the securities of the
Company. The Monthly Operating Report is limited in
scope, covers a limited time period, and has been
prepared solely for the purpose of complying with the
monthly reporting requirements of the Bankruptcy Court.
The Monthly Operating Report was not audited or reviewed
by an independent registered public accounting firm and
was not prepared in accordance with generally accepted
accounting principles in the United States. The Monthly
Operating Report is in a format prescribed by applicable
bankruptcy laws and remains subject to future adjustment
and reconciliation. Therefore, the Monthly Operating
Report does not necessarily contain all information
required in filings to the Securities Exchange Act of
1934, as amended (the Exchange Act), or may present such
information differently from the presentation of
information in Exchange Act reports. There can be no
assurance that, from the perspective of an investor or
potential investor in the Companys securities, the
Monthly Operating Report is complete. The Monthly
Operating Report also contains information for periods
which are shorter or otherwise different from those
required in Exchange Act reports, and such information
might not be indicative of the Companys financial
condition or operating results for the period that would
be reflected in the Companys financial statements or in
its Exchange Act reports. Results set forth in the
Monthly Operating Report should not be viewed as
indicative of future results.
not to place undue reliance on the information contained
in the Monthly Operating Report, which was not prepared
for the purpose of providing the basis for an investment
decision relating to any of the securities of the
Company. The Monthly Operating Report is limited in
scope, covers a limited time period, and has been
prepared solely for the purpose of complying with the
monthly reporting requirements of the Bankruptcy Court.
The Monthly Operating Report was not audited or reviewed
by an independent registered public accounting firm and
was not prepared in accordance with generally accepted
accounting principles in the United States. The Monthly
Operating Report is in a format prescribed by applicable
bankruptcy laws and remains subject to future adjustment
and reconciliation. Therefore, the Monthly Operating
Report does not necessarily contain all information
required in filings to the Securities Exchange Act of
1934, as amended (the Exchange Act), or may present such
information differently from the presentation of
information in Exchange Act reports. There can be no
assurance that, from the perspective of an investor or
potential investor in the Companys securities, the
Monthly Operating Report is complete. The Monthly
Operating Report also contains information for periods
which are shorter or otherwise different from those
required in Exchange Act reports, and such information
might not be indicative of the Companys financial
condition or operating results for the period that would
be reflected in the Companys financial statements or in
its Exchange Act reports. Results set forth in the
Monthly Operating Report should not be viewed as
indicative of future results.
Cautionary Note Regarding the Companys Equity Securities
The Companys proposed Plan of Reorganization provides
that the Companys existing common stock and preferred
stock will be cancelled and the existing holders will not
receive any distribution. If certain requirements of the
Bankruptcy Code are met, a Chapter 11 plan of
reorganization can be confirmed notwithstanding its
rejection by the Companys equity securityholders and
notwithstanding the fact that such equity securityholders
do not receive or retain any property on account of their
equity interests under the plan.
that the Companys existing common stock and preferred
stock will be cancelled and the existing holders will not
receive any distribution. If certain requirements of the
Bankruptcy Code are met, a Chapter 11 plan of
reorganization can be confirmed notwithstanding its
rejection by the Companys equity securityholders and
notwithstanding the fact that such equity securityholders
do not receive or retain any property on account of their
equity interests under the plan.
The Company cautions that trading in the Companys common
stock and preferred stock during the pendency of the
Chapter 11 case is highly speculative and poses
substantial risks. Even though the Companys common stock
and preferred stock continues to be quoted on the OTC
Pink Marketplace, it has no underlying asset value under
the proposed Plan of Reorganization. The Companys
stockholders should not view the trading activity of its
common stock or preferred stock on the OTC Pink
Marketplace or any other market or trading platform as
being indicative of the recovery the Companys
stockholders will receive, if any, in the Chapter 11
case.
stock and preferred stock during the pendency of the
Chapter 11 case is highly speculative and poses
substantial risks. Even though the Companys common stock
and preferred stock continues to be quoted on the OTC
Pink Marketplace, it has no underlying asset value under
the proposed Plan of Reorganization. The Companys
stockholders should not view the trading activity of its
common stock or preferred stock on the OTC Pink
Marketplace or any other market or trading platform as
being indicative of the recovery the Companys
stockholders will receive, if any, in the Chapter 11
case.
Exchange Act Reports
The Company has suspended the filing of its regular
periodic reports on Form 10-K and Form 10-Q with the SEC.
The Company, however, intends to furnish copies of the
Monthly Operating Reports that are required to be
submitted to the Bankruptcy Court under cover of Current
Reports on Form 8-K and to continue to file Forms 8-K
disclosing material developments concerning the Company.
periodic reports on Form 10-K and Form 10-Q with the SEC.
The Company, however, intends to furnish copies of the
Monthly Operating Reports that are required to be
submitted to the Bankruptcy Court under cover of Current
Reports on Form 8-K and to continue to file Forms 8-K
disclosing material developments concerning the Company.
| Item 9.01. |
Financial Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit No.
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Description
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2.1*
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Asset Purchase Agreement made and entered into
effective as of January 18, 2017, by and among International Shipholding Corporation, LMS Ship Management, Inc., Marco Shipping Company (PTE) Ltd., Gulf South Shipping PTE Ltd., N.W. Johnsen Co., Inc., MPV Netherlands C.V., MPV Netherlands Cooperatief U.A., and MPV Netherland B.V., as Sellers, and J Line Corporation, Seaocean Carriers PTE Ltd., and Arcadia Marine, L.L.C., as Buyers |
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99.1
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First Amended Joint Chapter 11 Plan of
Reorganization for International Shipholding Corporation and its Affiliated Debtors |
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99.2
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Disclosure Statement for First Amended Joint
Chapter 11 Plan of Reorganization for International Shipholding Corporation and its Affiliated Debtors |
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99.3
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Monthly Operating Report
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* Exhibits and Schedules have been omitted to Item
601(b)(2) of Regulation S-K. A list of these Exhibits
and Schedules is included after the pages to the Asset
Purchase Agreement. The Company agrees to furnish a
supplemental copy of any such omitted Exhibit or
Schedule to the SEC upon request.
601(b)(2) of Regulation S-K. A list of these Exhibits
and Schedules is included after the pages to the Asset
Purchase Agreement. The Company agrees to furnish a
supplemental copy of any such omitted Exhibit or
Schedule to the SEC upon request.
to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto
duly authorized.
1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto
duly authorized.
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INTERNATIONAL SHIPHOLDING CORPORATION
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By:
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/s/ Manuel G. Estrada
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Manuel G. Estrada
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Vice President and Chief Financial Officer
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| Date: | January 24, 2017 |
EXHIBIT INDEX
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Exhibit No.
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Description
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2.1*
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Asset Purchase Agreement made and entered into
effective as of January 18, 2017, by and among International Shipholding Corporation, LMS Ship Management, Inc., Marco Shipping Company (PTE) Ltd., Gulf South Shipping PTE Ltd., N.W. Johnsen Co., Inc., MPV Netherlands C.V., MPV Netherlands Cooperatief U.A., and MPV Netherland B.V., as Sellers, and J Line Corporation, Seaocean Carriers PTE Ltd., and Arcadia Marine, L.L.C., as Buyers |
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99.1
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First Amended Joint Chapter 11 Plan of
Reorganization for International Shipholding Corporation and its Affiliated Debtors |
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99.2
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Disclosure Statement for First Amended Joint
Chapter 11 Plan of Reorganization for International Shipholding Corporation and its Affiliated Debtors |
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99.3
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Monthly Operating Report
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* Exhibits and Schedules have been omitted to Item
601(b)(2) of Regulation S-K. A list of these Exhibits
and Schedules is included after the
601(b)(2) of Regulation S-K. A list of these Exhibits
and Schedules is included after the
About INTERNATIONAL SHIPHOLDING CORPORATION (OTCMKTS:ISHCO)
International Shipholding Corporation is a holding company. The Company, through its subsidiaries, operates a diversified fleet of the United States and international-flagged vessels that provide domestic and international maritime transportation services under medium to long-term time charters or contracts of affreightment. It operates through three segments: Jones Act, which deploys over two bulk carriers, over three integrated tug or barge units, each consisting of one tug and one barge, and one harbor tug acquired; one belt self-unloading coal carrier to transport coal under a time charter, and one vessel that transports molten sulfur under a contract of affreightment; Pure Car Truck Carriers (PCTCs), which deploys over five PCTCs, including over four United States flag vessels and one international-flagged vessel, and Rail-Ferry, which uses its two roll-on or roll-off special purpose double deck vessels that carry rail cars between the United States Gulf Coast and Mexico. INTERNATIONAL SHIPHOLDING CORPORATION (OTCMKTS:ISHCO) Recent Trading Information
INTERNATIONAL SHIPHOLDING CORPORATION (OTCMKTS:ISHCO) closed its last trading session 00.000 at 0.100 with 12,100 shares trading hands.