April 11 - According to statements released by both companies, Horizon Lines has reached an agreement with Ship Finance International Ltd to terminate five charter ship contracts.
The companies said that the deal will offer Ship Finance, the owner and operator of the 2,824 teu container ships that were built in Korea in 2006, warrants exercisable into ten percent of the common stock of the restructuring Horizon Lines, Inc and USD40 million in second lien notes.
"Ship Finance will become a large stakeholder in the restructured Horizon Lines and expects to benefit from both the interest on the notes as well as the value of securities received," said the chief executive of Ship Finance Management AS, Ole B. Hjertaker.
"The redelivery of the five vessels to Ship Finance will enable Horizon Lines to focus entirely on its core domestic U.S Jones Act container market, and Horizon Lines should be well positioned to deliver positive results going forward," Hjertaker said.
Charlotte-based Horizons Lines says it has completed transactions with over 99 percent of its noteholders that will slash USD188.4 million worth of the shipping company's debt.
"The significant deleveraging resulting from these transactions greatly improves the company's cash flow and liquidity, allowing for greater financial flexibility and stability," said Michael T. Avara, executive vice president and chief financial officer for Horizon Lines.