Contact Information: Contact Information: Joseph Gehegan Chief Operating Officer U.S. Shipping Partners 1-732-635-1500
U.S. Shipping Partners Plan of Reorganization Confirmed by Bankruptcy Court
Company Expected to Emerge From Pre-Arranged Chapter 11 by Mid-October
| Source: U.S. Shipping Partners
EDISON, NJ--(Marketwire - October 1, 2009) - U.S. Shipping Partners, L.P. (PINKSHEETS : USSPZ )
(the "Company") announced today that the Bankruptcy Court for the Southern
District of New York has confirmed the Company's Plan of Reorganization.
The confirmation order is the last step in the Company's pre-arranged
Chapter 11 restructuring. U.S. Shipping Partners will emerge from Chapter
11 when the plan becomes effective, which is expected to occur in
approximately 10-20 days.
On the effective date, the Company will be renamed U.S. Shipping Corp and
will have a new corporate structure and Board of Directors. The Company
will continue to be led by a seasoned team of executives, including Joseph
Gehegan who will become President and Chief Executive Officer, Albert
Bergeron who will join as Vice President and Chief Financial Officer and
Jeffrey Miller, Vice President and Head of Chartering.
"Today is an important day in the history of our Company," said Joseph
Gehegan. "We have successfully restructured our balance sheet to reduce
leverage and improve liquidity. We were able to continue business as usual
during the restructuring, including paying vendors in the ordinary course
of business. The Company will continue normal operations through the
remainder of the case."
"We are most appreciative of the trust, confidence and loyalty our
customers have shown us and the hard work and dedication demonstrated by
our employees," Gehegan said. "We remain committed to the highest standards
of operation and care for health, safety and the environment, and to
delivering the superior service for which U.S. Shipping is known."
Ronald L. O'Kelley will complete his tenure as CEO of the U.S. Shipping
Partners L.P. upon its emergence from Chapter 11. In doing so, Mr. O'Kelley
will have delivered on his commitment to the Board, made when he assumed
the role of CEO, to reduce the Company's leverage and improve its
liquidity.
"It has been an exciting, but very challenging time as the Company dealt
with a significant drop in demand and greater competition that placed
increased pressure on the Company's cash flow from operations," O'Kelley
said. "The decision to pursue a Chapter 11 reorganization came only after
extensive efforts were made to improve the Company's liquidity and pursue
other strategic alternatives. Now that our debt restructuring is nearly
complete, we have accomplished what was needed at this point in the
Company's history. As I evaluate new opportunities, I wish to thank
everyone involved in the process. It was a great team effort."
As previously announced, the consensual restructuring plan, among other
things, provides that $100 million of second lien debt will be extinguished
in exchange for 50% of the equity of the reorganized company, and reduces
the first lien debt, including swaps, by approximately $55 million and
reinstates the remaining $300 million at an improved rate of interest. The
holders of the first lien debt are also receiving 50% of the equity of the
reorganized company. The existing and outstanding common units,
subordinated units and general partnership interests of the Company will be
cancelled without the payment of any amount to the holders thereof.
About U.S. Shipping Partners L.P.
U.S. Shipping Partners L.P. is a leading provider of long-haul marine
transportation services for refined petroleum, petrochemical and commodity
chemical products in the U.S. domestic coastwise trade. The Company's
existing fleet consists of twelve tank vessels: four integrated tug barge
units; one product tanker; three chemical parcel tankers and four ATBs.
For additional information about U.S. Shipping Partners L.P., please visit
www.usslp.com.
This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission. All statements, other than statements
of historical facts, included in this press release that address
activities, events or developments that the Company expects, believes or
anticipates will or may occur in the future are forward-looking statements.
These statements are based on certain assumptions made by the Company based
on its experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are appropriate
in the circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control
of the Company, which may cause its actual results to differ materially
from those implied or expressed by the forward-looking statements. Such
assumptions, risks and uncertainties are discussed in detail in the
Company's filings with the SEC and include, among other things, the impact
of our bankruptcy filing on our business, customers and employees, our
liquidity, future charter rates, and demand in the spot market for vessels.