The charter of Moby Group’s roro GIUSEPPE LUCCHESI has begun. Cotunav started to operate her between Rades and Italy (12+12 months).
Moby Group, with only one roro left after all others have been successfully chartered out, is in the meanwhile looking forward to the delivery of the new ropaxes. The first is soon to be delivered by GSI SHIPYARD in China, adding freight capacity.
Moby Group announced that on 21 September, together with its wholly-owned subsidiary CIN SpA and the parent company Onorato Armatori Srl (Moby, CIN and Onorato Armatori Srl form together the Moby Group) entered into a non-binding Memorandum of Understanding with an ad hoc group of bondholders who together hold in excess of 33% of the outstanding amount under the EUR 300 million Senior Secured Notes due issued by Onorato Armatori.
“Pursuant to the MoU, the Moby Group and the Ad Hoc Group will engage in negotiations with the purpose of, inter alia, providing the additional financial resources necessary to support a new composition plan to be submitted to Moby Group financial creditors”. The company also added that will “make a further announcement in due course, as appropriate”.
This week Bloomberg also reported that Morgan Stanley and two of its top distressed-debt traders are being sued by Italian ferry operator Moby which claims it has recordings showing the bank and an investor were secretly trying to seize control of the company away from other creditors.
Compagnia Italiana di Navigazione, the company part of Moby group which controls the former public ferry company Tirrenia, announced that five ropax lines will be closed down from December 1st.
The reason behind this decision is the postponement of the expiring date of the public convention for the maritime continuity with the islands which was approved by law last summer but not formalized yet by the Italian government.
The five lines set to be closed are the following:
Tirrenia Cin also said that large part of the workforce aboard and onshore is at risk.
The decision by the Italian government to potentially extend the EUR 72 million of subsidies to Compagnia Italiana di Navigazione (part of Moby group) until 31 July 2021, but probably even beyond, was not appreciated by several ro-ro and ferry operators in Italy.
One of them Antonio Musso, CEO of Grendi Trasporti Marittimi, said to the local media Port News: “The 12-month extension of the subsidies to Tirrenia-Cin is nonsense and devastating for the economic equilibrium of the maritime transport market between Italy mainland and Sardinia”. He added: “Today the essential links to and from the major islands are guaranteed by several private operators on all the routes. I hope that the European Commission will intervene on the subject, otherwise we will do it: there are enough elements to oppose a contribution that clearly distorts competition”. Thus, Grendi seems to be ready to take the case to the Italian Antitrust Authority or to the Administrative Regional Court of Lazio.
Generally speaking, also Emanuele Grimaldi recently said he would react to any form of public support to unhealthy ferry companies, which may distort competition.
Moby Announced a Standstill Agreement with Bondholders and Negotiation with the Banks
The Milan-based Moby group announced that it entered into confidentiality agreements and a standstill agreement with a group of bondholders under the €300 million bond, due 2023, issued by Onorato Armatori Spa (company subsequently merged into Moby).
Pursuant to the standstill agreement, the company shall, inter alia, provide certain due diligence information to the group of bond holders with a view to the Moby group and with the objective to negotiate the terms of a potential restructuring transaction. “In change the financial investors shall refrain from taking enforcement or repayment actions against the company. It is contemplated that the Standstill Agreement shall continue until 29 February 2020” the announcement from Moby explains.
The ferry company controlled by Vincenzo Onorato is also engaged in discussions with the banks (Unicredit, Intesa Sanpaolo, Ubi, Banco bpm and Mps) under the €260 million loan regarding a potential restructuring transaction. “In connection with the ongoing discussions with the lenders, the company has made a request for the lenders to standstill during this period” Moby informed.
The Onorato-controlled group concluded specifying that “the company will not make in mid-February the scheduled payments due under the notes and the senior facilities agreement, or the scheduled amortization payment due under the senior facilities agreement”. Moby’s business and operations are expected to continue to operate as normal during the restructuring discussions.
In a letter sent to the editor in chief of the Italian newspaper Corriere della Sera, replying to an article published a few hours earlier, Vincenzo Onorato, head of Moby Group, revealed some details of the business plan that he was trying to perform until the action taken from the bondholders to the Court of Milan made the things going worse.
One of the most interesting details is that both the roro ships MARIA GRAZIA ONORATO and ALF POLLAK bareboat chartered by Fratelli Onorato Armatori and sub-chartered to Tirrenia Cin was not done directly with Moby, in order not to increase the company’s financial exposure. “At least until we were able to obtain a financial deleverage of the group” and this plan was possible with the sale and purchase of two ferries with DFDS since “EUR 66 millions of the total 75 million expected should have gone to the banks as anticipated payment of the mortgage”. The deal was not completed also because Unicredit did not give the needed green light.
Going back to the two roro ships, Onorato added: “We already informed the banks about our availability to put them inside Moby group” thus transferring the control from Fratelli Onorato Armatory, separated company controlled by Vincenzo Onorato’s sons, Achille and Alessandro.
The seasoned Italian shipowner concluded anticipating that “the group controlled by Onorato Armatori will close 2019 in profit and with better results compared with the previous year”. He further stated that Moby’s fleet has a value in his opinion of EUR 1.2 billion.
Moby Group In Legal Confrontation With The Bondholders
A legal conflict between Moby Group and the bondholders has just started.
A investors statement from the Milan-based ferry company says that “Moby S.p.A. has instructed legal counsel to defend it in insolvency proceedings brought before the Court of Milan by a number of claimants who have identified themselves as holders of an unspecified principal amount of Moby’s fixed rate senior secured notes originally issued in February 2016”.
The statement further adds: “Moby considers the allegations made by the claimants to be entirely groundless and, accordingly, intends to challenge the action taken by them by all appropriate means”.
Moby’s EUR 300 m bond is listed on the Luxembourg stock exchange.
Moby group is rumoured to have sold the ro-ro vessel BARBARA KRAHULIK to the German ferry operator TT Line.
Trasmediterranea’s VILLA DE TERROR has finally been delivered.
The Moby Group closes 2018 with growth in combination with challenges.
Achille Onorato, CEO of the Group agrees that 2018 was not an easy year. However, entering new business areas and finalising investments will be beneficial as from Q1, 2019.
Revenues by region:
Figures (in € thousands)
On 11 February, Moby Group has paid the pool of banks led by Unicredit, EUR 50 million, as an instalment of the loan of EUR 200 million granted in 2016.
Upon a request for a comment on that, the Milan-based group controlled by the Onorato family said that “as for the loan, all the instalments in the past and in the future have been and will be paid, and the same is going to happen for the one expiring this month.”
Some concerns circulated among the financial stakeholders in the last few days on that matter.
The Italian ferry group also confirmed that three bank transfers for a total amount of EUR 85 million has been made from CIN Tirrenia to Moby at the end of 2018 but not specifying the reasons behind.