[111011.EN.SEA] Horizon Saved From Bankruptcy With US$650 Million Refinancing Deal

TROUBLED Horizon Lines, brought to near insolvency by a US$15 million price-fixing fine, reduced from $45 million, has made a $650 million financial restructuring deal that delivers America's biggest shipping line into the hands of its bondholders and rescues the company from bankruptcy.

"We now have a new capital structure that eliminates the refinancing uncertainty faced by our company. We have put in place a solid financial foundation that affords us the opportunity to grow our business and reduce debt," said company president CEO Stephen Fraser.

Under the deal, holders of 99.3 per cent of the company's 4.25 per cent convertible notes due in 2012 will exchange their notes for $278.1 million of new six per cent convertible notes and $49.7 million in common stock and warrants, reported London's International Freighting Weekly. This leaves bondholders with 61 per cent of the shares, or as much as 95 per cent if all new convertible notes were exchanged for stock.

Horizon, based in Charlotte, North Carolina, and its subsidiaries also took on a $100 million, asset-based credit facility arranged by Wells Fargo Capital Finance, said the report.

Source : HKSG.