Global Ship Lease reschedules US$800 million debt on exacting terms

HARD TIMES for New York-listed shipowner Global Ship Lease (GSL) were eased through the rescheduling of US$800 million in debt that will now enable it to purchase of the 6,627-TEU CMA CGM Berlioz for $82 million, reports Paris-based Alphaliner News of Paris.

But it came at a price. Dividend payments are to end and a cancellation of a $200 million in undrawn credit comes with the exacting rescheduling deal that includes a commitment to pay 3.5 per cent above the London inter-bank bid and offer rate (LIBOR) on the loan, on top of an amendment fee of $1.5 million, which was paid up front.

Having been in breach of its loan agreement since April, lenders Fortis Bank, Citibank, HSH Nordbank, Sumitomo Mitsui, DNB Nor, KfW IPEX and the Bank of Scotland have now waived payment until April 30, 2011.
GSL's sponsor, CMA CGM, also agreed to defer redemption of the $48 million of preferred shares it holds until after the final maturity of the credit facility in August 2016 and retain its current 45 per cent holding of 24.4 million shares in GSL until at least November 2010.

GSL still has two 4,250-TEU newbuilding deliveries expected late next year, for which it has not secured funding. If GSL is unable to purchase the two newbuildings, it will lose its $15 million deposit already paid, said Alphaliner.

(Source: www.schednet.com)