What applies to bank lending in coastal shipping

By Anastasia Vamvaka

The market is waiting for the approval of the ANEK rescue plan submitted by the Attica group. A year ago, the Attica group submitted a rescue plan for ANEK to the latter’s creditors, which provided for the undertaking to cover ANEK’s working capital needs. The business plan that accompanies Attica’s proposal foresees a significant “haircut” of ANEK’s banking obligations, without touching the obligations to third parties (suppliers, advance ticket collection, etc.) as well as the receivables from financial leasing contracts.

Creditors Piraeus and Alpha Bank agreed on the initial plan to share the burden of ANEK’s restructuring.

According to XTRC’s report, in December 2021, Intrum, manager of Piraeus’ receivables, submitted a proposal to acquire Alpha bank’s receivables to ANEK’s remaining creditors, Attikis bank and Cross Ocean. After the refusal of the last two, the Piraeus bank submitted on its own a proposal to purchase the claims of the Alpha bank, which the latter accepted.

The agreement between the two banks has not been officially announced and there has been no notification of creditors to Attica Group, a key strategic investor. If an agreement is reached with the creditors, Attica should also reach an agreement with the shareholders of ANEK.

The three poles that gather interest with their direct or indirect participation in Greek shipping and mainly in ANEK and Attica are Piraeus Bank and MIG. The two coastal shipping companies ANEK and Attica belong to the 14 companies listed on the Stock Exchange, in which, due to loan debts, the banks have the position of main shareholder, with a minimum percentage of 5%.

On 7/21/2022 Piraeus Bank transferred to STRIX Holdings LP all the shares it held in Attica (25,559,429 voting rights corresponding to a percentage of 11.8437%).

“STRIX Holdings LP” is controlled, through a chain of companies, by “BLANTYRE CAPITAL (CAYMAN) LTD”, a company based in the Cayman Islands, which is controlled by Mubashir Mukadam. With this development, Piraeus Bank no longer participates directly in the share capital of Attica, but only indirectly, through its participation in the share capital of MIG, a company that controls Attica with a percentage of 79.38%.

ANEK

The company and the group suffered in the fiscal year ending on 31.12.2021 a net loss of 43.9 million euros and 40.2 million euros respectively, with the result that the equity of the company and the group deteriorated significantly and became negative at 52 .4 million euros and 40.5 million euros respectively. At the same time, the working capital of the company and the group is negative by 265.4 million euros and 256.7 million euros respectively, while there are overdue obligations of the parent company to credit institutions.

In addition, the company failed to secure resources or financing to exercise a contractual right to buy a chartered vessel under the more specific terms of the charter contract resulting in a capital loss of €15.66 million from the write-off of the ship’s amortized value and the right to buy his.

The above facts and circumstances, combined with the negative situation and high fuel prices in the market, indicate the existence of a material uncertainty which may raise significant doubt about the ability of the company and the group to continue their activity.

Bank lending in coastal shipping

Loan obligations in 2021 amounted to 742 million euros from 683 million euros in 2020, showing an increase of 9%. The increase is due to a long-term loan of 55 million euros that Attica Group concluded with a banking institution, with a duration of 5 years, and the unpaid interest of ANEK.

ANEK LINES has been forced to reclassify its long-term liabilities into short-term liabilities as of 31.12.2018, since it failed to service its borrowing and based on the relevant contracts, the non-service of the loan obligations constitutes non-compliance with the terms, which entails the obligation of the company for full repayment of the loans. As a result, short-term bank liabilities on 31.12.2021 amounted to 260.1 million euros compared to 252.9 million euros on 31.12.2020 and are increased by the outstanding interest of the financial year 2021.

In case of completion of the agreement between Piraeus and Alpha Bank and the creditors of ANEK on the extent of the impairment of its loan obligations, ANEK will be saved. The plan includes the purchase of Alpha Bank’s loans to ANEK by Piraeus, which will then, together with the remaining creditors, refinance the remaining impaired lending and transfer it to the newly enlarged Attica.

The agreement under discussion envisages a significant reduction in bank lending, up to 150 million euros, and ensuring that suppliers are paid in full.

The Minoans have zero bank borrowing after paying off their bond loan in full.