UPDATE 1: Moby Draft Debt Restructuring Plan Envisages 2 Types of Recovery Alongside New Money From Third-Party Fund

UPDATE 1: 1:57 p.m. ET 11/26/2020: Moby has approached its ad hoc bondholder group with a draft restructuring proposal consisting of new money from a third-party fund and two alternative forms of recovery, sources close told Reorg.

Under the draft plan, the creditors may be able to choose between a 30% recovery, and a smaller cash recovery which would, however, also consist in the future proceeds deriving from potential asset sales, sources said. The proposal is not official yet and may still change.

The size and type of the new money remains unclear. Funds Clessidra and Europa Investimenti have submitted two non-binding proposals to the Italian shipping group, as reported. According to sources, the company would be more inclined to select the proposal by Europa Investimenti.

Creditors are discussing the draft proposal and have not told Moby whether they would like to continue negotiations on these grounds, sources said.

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Original Story 1:53 p.m. UTC on Nov. 24, 2020

Moby Approaches Creditors With Debt Restructuring Plan Involving New Money From Third-Party Fund; Concordato Proposal Deadline Dec. 28

Moby has approached its ad hoc bondholder group with a draft restructuring proposal consisting of new money from a third-party fund. Under the draft plan, part of the creditors’ recovery would be fixed at about 30%, and the rest variable and depending on asset sales, sources said. The proposal is not official yet and may still change.

The size and type of the new money remains unclear. Funds Clessidra and Europa Investimenti have submitted two non-binding proposals to the Italian shipping group, as reported.

The deadline for the company to present a concordato plan is Dec. 28, sources said. Moby filed for creditor protection under concordato in bianco at the end of June.

Negotiations involve not only Moby’s bondholders but also its bank lenders and administrators of Tirrenia di Navigazione, which carried out a protective seizure of the current accounts of Moby's subsidiary Compagnia Italiana di Navigazione (CIN) on March 30. The decision of Tirrenia di Navigazione’s commissioners came three weeks after the Rome Court ordered the collection of up to €55 million of CIN's assets and credits with regards to the first installment of a €180 million deferred payment, which Moby owes to Tirrenia and whose first installment was due in April 2016.

The majority of Moby’s fleet is pledged as a collateral against the company’s bank debt and €300 million senior secured notes. Excluded from the notes’ collateral are certain vessels which have minimal value and vessels Silvia Onorato, Vigore and Barletta each owned by Moby’s subsidiary San Cataldo, according to the notes’ offering memorandum.

As reported, Moby and its ad hoc bondholder group were previously discussing possible new money provision either from the ad hoc committee, in the form of a super senior loan, or from a third-party investor as an equity injection. They were talking about a potential change of governance for the Italian shipping group as well as about the unwinding of the company’s related-party transactions.

At the end of July, Moby sent a restructuring proposal to its creditors which contemplated the repayment of the company’s €300 million 2023 bonds at about 20-25 cents and a 10-year extension of its bank debt. The notes would be repaid through the proceeds of the sale of its tugboat division. According to the proposal, the value of the company’s fleet in a liquidation scenario would amount to less than €250 million, sources said.

Moby had 16 tug boats in 2018 which were valued by the company at about €41 million. The whole tugboat division, including concession contracts, could be worth about €70 million, sources told Reorg.

The company is assisted by PwC and Gianni, Origoni, Grippo, Cappelli & Partners, while the bondholder group - which includes funds Sound Point Capital, Cheyne Capital, BlueBay and Aptior Capital - is working with Houlihan Lokey, Chiomenti and Gatti Pavesi Bianchi as financial and legal advisors, respectively.

The capital structure of the last reported results for the third quarter of 2019 is below. The group delayed its full-year 2019 and first-quarter 2020 results as a result of the Covid-19 crisis.
 
--Luca Rossi