Danaos had to negotiate with a number of lender groups, each holding separate security over assets of differing value, to close its $2.2 billion debt restructuring. Importantly, all of the company’s existing shareholders also retained approximately 50% of the equity in the restructured business.
The Greek containership owner managed to complete the deal out of court, and with unanimous creditor support, a strategy not without its difficulties for a company with a complex capital structure.
“The challenge was working with a large group of lenders, all with different levels of impairment and with security interests at different levels for different ships,” said Skadden Arps partner Chris Mallon, who advised Danaos on the deal. “It was also about identifying and negotiating first with those lenders prepared to support the restructuring.”
Ebb and flow
The company was initially hit by financial difficulties...