The Hamburg-based shipping investment company König & Cie said it has reached an agreement with creditors to settle outstanding debt and contingent liabilities.
“With the help of two U.S.-based financial investors, Delos Shipping LLC, Dallas, Texas, and Tennenbaum Capital Partners, LLC, Santa Monica, Calif., the restructuring process has been successfully concluded and enables König & Cie to continue to operate,” the company said.
Shareholders Tobias König and Jens Mahnke sold 80 percent of the company to the new U.S. investors and they will continue to serve as managing directors of the company. The capital investment was used to settle, restructure or waive all of the company’s liabilities.
The company said “as a consequence of the financial crisis in 2008 and the subsequent collapse of the shipping and KG markets, König & Cie entered into a moratorium with its creditors and commenced a restructuring process.”
KGs, the abbreviation for Kommanditgesellschaft, are German limited partnerships that have been widely used to fund construction of ships.
König & Cie said it “changed its business model from a large retail-focused KG house to a small investment boutique and asset manager focused on the shipping sector and its investments.”
The company arranged the financing of ships through KGs and managed them for investors.
“If you don’t arrange them anymore than obviously a large portion of your income is gone. So we had to restructure and reorganize and become more like an asset manager, and that is what we did.” König said in a telephone interview with American Shipper
. “And we had to get rid of some liabilities, and with the help of our investors that is what we have done and refocused the company.
“Now we will use our expertise for projects that are more around institutional investors and private equity,” he said.
Over its life, König said the firm arranged the financing for about 100 ships, mostly tankers and bulk carriers, but also containerships. Today, it provides technical, commercial, and financial management of about 70 ships today.
During the restructuring process the firm reduced its headcount from 140 to about 60, and its annual overhead expenses by about 10 million euros.
König is a well-known figure in the U.S. maritime industry because of his efforts with the New York-based real estate investor Percy Pyne
IV to launch a U.S.-flag coastal shipping company for several
years. Their firm, American Feeder Lines (AFL), did operate a
service between Boston, Halifax, and Portland, Maine, but suspended
service last year.
“König & Cie has a unique international network in the shipping and offshore sector and has been a partner to successful international shipping companies for many years. As such, König & Cie was identified by Delos and Tennenbaum as an ideal platform for further investments in the shipping sector, which offers attractive opportunities for investors focused on distressed assets,” the company said.
“In the future, König & Cie will continue to manage the assets of the closed end funds which were issued in previous years. Additionally, König & Cie will focus on cultivating relationships with institutional investors and expanding its presence in the shipping sector.”
It said the company’s close cooperation with the shipping company, Marenave Schiffahrts AG, a publicly listed shipping trust with a fleet that includes, tankers, bulk carriers and container ships, will continue and Tobias König will remain its chief executive officer.
“Hamburg-based activities such as Trustee and Ship management are expected to be consolidated and new investment opportunities actively pursued,” said Brian Ladin, founder of Delos Shipping. “I have known Tobias for a number of years and have been impressed by his shipping expertise and huge network.”
He said he had come to Hamburg to buy containerships from König & Cie snd “realized that there was an excellent opportunity for us to invest in a broader shipping platform. The biggest advantage we have seen is that König & Cie is not just focused on one narrow segment but offers a wide range of expertise across the ship financing sector.
“Based in Hamburg, König & Cie is in the center of the ship finance industry, and has great contacts with many lenders and a proven track record of successfully acquiring and restructuring shipping assets,” Ladin added.
Tim Gravely, director at Tennenbaum Capital Partners, also said his firm was “excited about our investment in König & Cie and we look forward to pursuing other attractive investment opportunities in the shipping sector.” - Chris Dupin