BLT secures US approval for Indonesia court decision
BERLIAN Laju Tanker has won US court approval for its petition to recognise an Indonesian insolvency decision, according to chief executive of its US-based subsidiary Jack Noonan.
In a hearing yesterday, a judge in the US Federal Bankruptcy Court in New York agreed to recognise the March decision under an Indonesian court process known as PKPU as a “foreign main proceeding” under US Bankruptcy Code Chapter 15.
Mr Noonan said BLT’s attorneys believe that the judge will issue the official order today, allowing BLT to petition the court to enforce the PKPU plan in the US.
That plan was approved by a Jakarta judge on March 14, after secured creditors finally agreed a restructuring strategy after long and painful negotiations.
The US court decision clears an important hurdle to having the restructuring apply legally in the US, where several creditors have tried to pull BLT into involuntary bankruptcy.
BLT filed for Chapter 15 creditor protection in the US shortly after the agreement on the PKPU plan in Jakarta.
It will also seek recognition of the Indonesian decision in Singapore, where it also faces bankruptcy proceedings. Its next Singapore court date is in June.
BLT froze principal payments worth $418m in 2012, part of its outstanding debt of $1.9bn.
Many of BLT’s vessels are mortgaged to a consortium of banks as part of a loan agreement for $685m. It managed a fleet of 64 chemical tankers, 13 crude oil tankers, 16 gas carriers and two floating production, storage and offloading vessels at the time of its default in early 2012.
The company was brought down by low rates in the tanker markets and by having over-expanded, particularly in 2007-2008, when it added many ships to its fleet.
In 2007, it borrowed $850m to acquire Chembulk, based in Connecticut, when asset prices were at their highest.
Source: http://www.lloydslist.com/
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