Eimskip (Hf. Eimskipafélag Íslands) (Previously Avion Group)

2009

July - Eimskip had released details of its plans to create a new, financially strong shipping and logistics business and exit the cold storage business

These proposals were subject to the consent of the financial creditors of Eimskip.  Day to day operations of the shipping and logistics business including the payment to trade suppliers would be unaffected.

The new business would be owned by the financial creditors of Eimskip which included The Yucaipa Companies, a US private equity investor as a minority shareholder. Eimskip would also sell 49% of Versacold Atlas and gave an option for the remaining 51% to Yucaipa.

Since October 2008 Eimskip had been working with foreign and domestic advisors to develop a financial re-organisation proposal.  The company had an unsustainable debt burden resulting from failed acquisitions, significant guarantee claims and the downturn in trading resulting from the economic crisis in Iceland and around the world.  

The objective of the board of directors remained to maximise the returns to creditors and in so-doing to ensure the continuation of the Icelandic and North Atlantic operations and safeguard around 1,500 jobs.

'New' Eimskip would be entirely owned by the financial creditors of Eimskip:

• Landsbanki as a secured lender and the majority holder of the unsecured claims would own 45% of the new company
• Yucaipa would as secured lender surrender existing secured debt, and invest €15m of new capital into New Eimskip, in order to acquire 32% of the new company
• The remaining 23% of New Eimskip would be owned by the other unsecured financial creditors, representing more than 50 different creditors

The existing shareholders of Eimskip would not participate in New Eimskip going forward.

Eimskip estimates that returns to unsecured financial creditors would be approximately 12% of the total outstanding claims.

Yucaipa owned the largest cold storage company in the US, Americold. The Versacold Atlas sale process, which was commenced in September 2008 and managed by two leading global investment banks, concluded with lower bids than initially hoped.  The final offers received were unacceptable and provided no equity value to Eimskip.  Yucaipa, a bidder in the original process, indicated a willingness to participate in the re-organisation of Eimskip in order to facilitate the sale of Versacold Atlas and to take a minority stake in the new shipping and logistics business.

Yucaipa had acquired the ABN Amro secured loan to Eimskip, totalling approximately €120m as a precursor to the acquisition of Versacold Atlas.