Aegean Marine plans to sell its assets in a 363 sale under the U.S. Bankruptcy Code, according to sources, as the company's stock and bonds roil from last week's disclosure of potentially up to $300 million in asset misappropriation via fraudulent activities.
The Piraeus, Greece-based shipping company
said Friday that it believes up to $300 million of its cash and other assets were misappropriated to benefit a UAE-based company controlled by a former Aegean affiliate. Aegean said $200 million of receivables are uncollectible and need to be written off.
The company has been preparing for a chapter 11 in New York, as
reported in October, and faced a $94.6 million 4% convertible note maturity on Nov. 1. Swiss commodity trading house Mercuria is set to provide debtor-in-possession financing, as reported.
Aegean stock tanked 26 cents to 66 cents as of 11:05 a.m. ET Monday.
The company’s audit committee believes that the misconduct occurred in part because the former affiliate that controls Fujairah-based OilTank has exerted significant control over company personnel and assets through various inappropriate means, including threats of economic retaliation and physical violence. In addition, the former affiliate continues to have access to and control over the company’s electronic and physical files.
Arnold & Porter Kaye Scholer is advising the audit committee, and Norton Rose advised Mercuria on loan documents, according to sources. Arnold & Porter advised a special independent committee of directors when Aegean
sought to buy maritime waste treatment company HEC controlled partly by Aegean’s founder Dimitris Melissanidis for $367 million. The HEC deal was terminated after a group of stockholders sued the company and its board about a deal that investment bank Stifel said “it’s hard to even fathom how any transaction could possibly be worse.”
Moelis and Kirkland are advising Aegean, and Milbank Tweed is advising Mercuria. FTI Consulting is advising the agent to both the original $750 million global revolver and a $250 million U.S. revolving credit facility. Willkie Farr is advising agent to the U.S. facility, and Allen Overy is representing the global instrument. A group of convertible bondholders engaged PJT Partners and Akin Gump.
The 2018 notes last traded on small scale on Oct. 29 at 60.5, and the 2021 bonds last traded in September at about 65, according to TRACE.
Aegean, Arnold & Porter, Norton Rose did not respond to requests for comment.