His insights on shipping restructuring shared at this New York City event include:
Core competencies required for successful shipping restructuring include the optimism of a capital markets banker, the long-term perspective of a maritime industry banker and the pragmatism of a restructuring expert. This combination of competencies ensures evaluation of the widest range of realistic alternatives and matches much of the market, which o en amends and extends with an incremental pay-down or equity raise.
In global markets today, where neither the borrowers nor lenders have attractive alternatives, the restructuring process can be lengthier than otherwise necessary. Typically, planning and analytical work can be completed quickly when the principals either agree generally on terms or on a restructuring paradigm.
The courts with meaningful experience in large shipping bankruptcies understand the business issues well enough to apply the law, particularly in Houston, New York and Delaware. Bankruptcy judges work with companies in a wide range of industries; in many circumstances a company’s financial experts, CROs or management team can explain the business nuances to judges, so that restructuring objec ves can be met with greater certainty.
Based on the current rate environment (especially for dry bulk), amend and extend activities are expected to continue, but with greater inflows of new capital sources, including private equity and non-tradi onal lenders as well as asset sales and some insolvencies.