[EN-SEA] Maruba Fights Off Creditors as it Forced to Restructure

By : Rainbow Nelson, Patrick Hagen and Richard Meade - Thursday 8 October 2009

ARGENTINA’s leading shipping group, Maruba, has been forced into an emergency restructuring in a bid to avoid collapse.

The company, which is already facing one major lawsuit for non-payment of a supplier and several threats of further legal action from other creditors, has appointed HSH Corporate Finance to carry out the restructuring and manage issues of non-payment of suppliers.

Maruba contacted important creditors at the start of this week in a bid to ward off the threat of renewed legal action.

The group told one party that all creditors would be contacted within the next week by the German shipping finance specialist to bring about what it said would be “a fair and professional overall solution with all creditors to avoid a collapse”.

The plea for time, however, failed to prevent GE SeaCo from returning to court seeking $4.2m in unpaid container lease rents.

At least one other creditor has also told Lloyd’s List that it is currently on the brink of suing Maruba in order to recoup significant unpaid bills.

GE SeaCo originally brought the suit against Maruba and South Atlantic Container Line in June seeking an attachment order for $4.7m over unpaid container lease rents. After an agreement between Maruba and GE SeaCo was reached to pay the money owed in instalments the case was temporarily halted.

But last week GE SeaCo then went to court again in New York, this time saying that the September instalment had not been paid and seeking $4.2m. Despite several attempts to contact Maruba, company executives were unavailable for comment.

Lloyd’s List understands that several of the company’s creditors have agreed in principal to support the restructuring, however details as to what this will involve have not yet been decided.
Maruba has already admitted to one creditor in a letter seen by Lloyd’s List that without solidarity amongst those waiting for payment the deal is unlikely to work and the company will face collapse.

In recent months, bunker suppliers, shipowners and container leasing companies have complained of delayed payments from the privately-owned shipping group, which is ranked as the world’s 28th largest shipping line.

Many have restricted credit to the group, which operates 10 tugs in Argentine ports, four bulkers and 17 container vessels operating in all the principal trades to / from Latin America.

Earlier this year Maruba was forced to defend itself from a string of legal challenges in courts in New York owing to delayed payments on slot-sharing agreements and delays on payments for vessels chartered by the company.

In August, Maruba reached ‘mutually agreeable terms’ with German and French shipowners, CMA CGM and the Oetker Group on all of the related cases and it had hoped to draw a line under its difficulties at that point.

HSH corporate finance, which has been brought in to manage the Maruba restructure, also led the restructuring of CSAV earlier this year. In the case of CSAV, its intervention resulted in shipowners bailing the line out with a reduction in charter rates in return for shares in the company.

It remains unclear whether Maruba, which is not a quoted company, wants to propose a similar deal to owners. “They have not yet made an offer,” said the manager of a company that has ships on charter to Maruba.

“But we have been in talks with Maruba for some time now,” he said.
He added that the chances of rescuing Maruba were better than they had been for CSAV.

“Maruba has no newbuilding orderbook pressurising it,” he said. “It is very probable that it will survive this crisis.”

Another manager confirmed that Maruba had informed his company in a letter that it had commissioned HSH. He said that Jens Rohweder from HSH corporate finance already contacted him but no specific proposals have been made to date.

“HSH has only recently been mandated so we might have to wait for a few weeks until they come up with a scheme,” he said.

However, he said that Maruba was not among the worst business partners in terms of payments delays at the moment. He was also confident that Maruba would survive the crisis.

HSH declined to comment on the restructuring process or the outstanding legal cases.

Source : Lloyds List, 08.10.09