22 Apr 2016 07:00
Goldenport Holdings Inc.
Athens, 22 April 2016
Update on Discussions with Lenders and Delisting of Ordinary Shares
Goldenport Holdings Inc. ("Goldenport" or "the Company"), (LSE: GPRT) the international shipping company that owns and operates a fleet of dry bulk and container vessels, announces today an update on discussions with its lenders and the delisting of its Ordinary Shares from the London Stock Exchange.
Update on Discussions with Lenders and Sale of Vessels
On 22 January 2016, the Company suspended the servicing of its debt and has been in ongoing negotiations with its lenders to restructure its loan facilities. As set out in the Circular to Shareholders and Notice of EGM dated 11 March 2016, the amount of debt outstanding under each loan facility is significantly higher than the independent broker valuation of the respective vessels. On 31 March 2016, the Company obtained shareholder approval to proceed with the sale of certain vessels for a token consideration to entities controlled by the Dragnis family, subject to the novation of the related loan facilities, and to proceed with the disposal of all or substantially all of the assets of the Company otherwise than in the usual or regular course of the business conducted by the Company.
Despite the Company's best efforts to restructure its loan facilities, in the absence of availability of new capital to resume regular interest payments, the lenders have expressed their preference for selling six out of the eight vessels for a token consideration to entities controlled by the Dragnis family, subject to the novation of the related loan facilities, and selling the remaining two vessels in full and final settlement of the related loan facilities.
In light of the above, the Directors have unanimously approved the following vessel sales:
· the sale of the Eleni D to Nemea Marine S.A. for US$1, subject to the novation of the related Commerzbank Loan Facility;
· the sale of Milos and Pisti to Verona Navigation S.A. for US$1, subject to the novation of the related RBS Loan Facilities;
· the sale of D Skalkeas, Erato and Paris Jr to Meteora Shiptrading S.A. for US$1, subject to the novation of the related UniCredit Loan Facility; and
· the sale of Sifnos and Sofia for the best consideration that can be obtained, in full and final settlement of the related RBS Loan Facilities.
Nemea Marine S.A., Verona Navigation S.A. and Meteora Shiptrading S.A. are each companies controlled by the Dragnis family.
Cancellation of Admission to the Official List of the UKLA and to Trading on the Main Market of the London Stock Exchange
Further to the aforementioned decision to sell all the vessels of the Company, the Directors have unanimously approved a request to the Financial Conduct Authority ("FCA") for the cancellation of the admission of the Company's Ordinary Shares to the Official List of the UKLA and to trading on the Main Market of the London Stock Exchange (the "Main Market"), pursuant to Listing Rule 5.2.8 (the "Delisting").
Reasons for the Delisting
As the Company has previously reported, the dry bulk and containership shipping markets have become increasingly challenging with increasing idle capacity, weakening vessel charter rates and receding asset values.
The prevailing market conditions are probably the worst of the last 30 years with the Baltic Dry Index dropping to historic lows, and average daily hire rates falling below even a vessel's daily operating expenses. As a consequence, the Company's cash reserves have been drained, in order to cover operating expenses and finance costs. In light of the foregoing, the reduction of costs, whilst maintaining an appropriate level of service, has been one of the Company's main objectives.
The adverse market conditions have made Company losses unavoidable over the past few years. During the same period, there has been a significant fall in the Company's Ordinary Share price, resulting in a shrinking market capitalization.
The primary objectives and perceived benefits of being quoted on a public market are to gain access to capital and create a liquid market in the Company's Ordinary Shares. If these objectives cannot be achieved efficiently and cost effectively, the Board has a duty to reconsider the merits of a listing. The Board has reached the view that the Company does not enjoy any of these benefits. In particular, the Company has not managed to raise capital and increase its free float since the Placing and Open Offer in July 2010 and, furthermore, has always suffered from low levels of liquidity in the trading of its Ordinary Shares.
In the current financial climate as described above, and taking into account the Company's low market capitalization and the costs of maintaining the listing, while having no operating assets after the proposed disposals mentioned above, it has become evident that it would be economically sensible to proceed with the Delisting.
There are costs associated with maintaining the Company's listing on the London Stock Exchange, including the annual fees payable to the London Stock Exchange and other related professional costs. The Delisting will significantly reduce administrative expenses and management time required in connection with being a publicly listed company and enable management to focus on the proposed disposals mentioned above.
In accordance with Listing Rule 5.2.8, the Company is required to give at least 20 business days' notice of the intended cancellation. Accordingly, the preferred date of cancellation is 24 May 2016 and the Company has made a request to the FCA to this effect. It is expected that trading on the Main Market in the Ordinary Shares will cease at the close of business on 23 May 2016 with the Delisting becoming effective from 0800 UK time on 24 May 2016 (the "Cancellation Date").
Effects of Delisting on Shareholders and Corporate Governance
The principal effect of the Delisting is that Shareholders will no longer be able to buy and sell Ordinary Shares on the Main Market or any other public stock market and the Company will no longer be required to comply with the continuing obligations set out in the Listing Rules and the Disclosure and Transparency Rules. In particular, the Company will not be bound to announce to the market material events, administrative changes or material transactions, or to announce interim or final results.
The Company intends to continue to prepare annual consolidated financial statements, which will be audited in accordance with IFRS and sent to Shareholders.
Furthermore, the Company will no longer be required to comply with corporate governance requirements applicable to publicly listed companies, and the Company will no longer be subject to the provisions of the Disclosure and Transparency Rules relating to the disclosure of changes in significant shareholdings in the Company.
The Company will continue to comply with applicable laws and regulations, including the Marshall Islands Business Corporations Act and the provisions of the Company's Articles of Association.
It is the Company's intention to retain the existing Board structure that comprises three Directors; the Non-Executive Chairman of the Board and two Executive Directors.
Trading of Ordinary Shares before and after Delisting
During the time period following the announcement of the Company's intention to cancel its Main Market listing, the Shareholders are entitled to sell Ordinary Shares in the market before the Delisting takes place. However, there may not be sufficient liquidity in the market to facilitate this in all cases.
The Ordinary Shares will remain freely transferable after Delisting, although there will be no listing or quoting of the Ordinary Shares on any regulated market. Accordingly, the Ordinary Shares may not be readily capable of sale, and the price at which any such sale occurs may not reflect the value of an interest in the Company.
Information for Depositary Interest Holders
Depositary Interest Holders should contact their nominee, stockbroker, bank or other agent to obtain further information on how the cancellation of the listing of the Shares on the Official List and removal of such shares from trading on the Main Market of the London Stock Exchange will impact such holders.
Taxation
All Shareholders are advised to consult their professional advisers about their own tax position, as the Delisting may have taxation consequences for Shareholders.
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For further information, please contact:
Goldenport Holdings Inc.
John Dragnis, Chief Executive Officer +30 210 8910 500
Alexis Stephanou, Chief Financial Officer +30 210 8910 542
finance@goldenport.biz
Tavistock Communications
Jos Simson / Emily Fenton +44 (0) 20 7920 3150