Swan Reefer Debt Restructuring

You got to know when to hold em,
Know when to fold em,
Know when to walk away,
Know when to run…

Aage Figenschou, managing director of Oslo-listed Swan Reefer, knows all that, and also when to smile. He could well afford to on June 1, after MeesPierson and ING agreed a restructuring of $243m in total mortgage debts. The figure was a remnant of two tranches, a senior one worth $220m (both banks) and a junior one of $30m (ING) raised in the summer of 1998 in connection with the ambitious $164.5m takeover of Irgens Larsen’s shipping operations. The banks were concerned about the loans due to Swan’s low liquidity, a dead reefer market, and low vessel values. They had declared Swan to be in default, and had given the company until June 1 to work out a recapitalisation and restructuring, or else. The “or else”, of course, was liquidation.

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