Rickmers

Rickmers: is undertaking a non-underwritten renounceable 1-for-1 rights issue, at issue price of $0.24/unit, to raise gross proceeds of up to $101.7m. This represents a 33% discount to the last closing price at $0.36, and a discount of 20% to the theoretical ex-rights price (TERP ) of $0.30/unit. Conditional upon the rights issue within 6 mths from 15 May’13, Rickmers has successfully secured an agreement with all its lending banks to extend the current value-to-loan (VTL) covenant waiver for a further period of one and a half years till end Dec ’14. Assuming the rights issue is fully subscribed, proceeds will be channeled toward full repayment of the Top Up Facility, which will lower Rickmers’ VTL covenant ratio from 133% to 110%. Rickmers’ gearing will also be lowered from 59.8% to 51.8% on a pro forma basis. Rickmers further maintained its current borrowing costs of its bank facilities which are all priced at 1.75% pa above 3mth USD Libor. This will enable Rickmers to sustain its steady cash flows. Rickmers intends to maintain quarterly DPU at US 0.6 cts for FY13, which means a unitholder who takes up his full entitlement at rights issue price would receive an improved DPU yield for FY13 of approx 10% over the TERP.