Mercuria Moves to Buy Aegean as Bunker Supplier's Operations Return to "Business as Usual"

by Ship & Bunker News Team
Friday November 9, 2018

Aegean Marine Petroleum Network [NYSE:ANW]’s bunker operations are back to “business as usual” following today’s approval of Mercuria's debtor-in-possession (DIP) financing facility.

The commodities trader has now also signalled its intent to buy the entire business.

Having been earlier contested by the so-called Ad Hoc Group (AHG) of Aegean's creditors, the $532 million DIP facility today has been approved in full.

“Vendor payments are processing today in normal course and the company is operating business as usual,” a source close to the matter told Ship & Bunker.

In the order granting the DIP motion, United States Bankruptcy Judge Honorable Stuart M. Bernstein wrote that Aegean “do not have sufficient liquidity, including cash collateral, to operate their businesses in the ordinary course of business without the financing requested in the Motion.

“The Debtors’ ability to maintain business relationships with their vendors, suppliers and customers, to pay their employees, pay certain fees and expenses as set forth herein, and to otherwise fund their operations is essential to the Debtors’ continued viability as the Debtors seek to maximize the value of the assets of the Estates for the benefit of all creditors of the Debtors.”

Bernstein also concluded that there was no credit available on more favourable terms.

“After considering all alternatives, the Debtors have properly concluded, in the exercise of their sound business judgment, that the DIP Facilities represent the best financing available to them at this time, and are in the best interests of all of their stakeholders,” he wrote.

Earlier this week, Aegean revealed it has been operating at "severely limited capacity" since March 2018, and on multiple occasions in June it had zero borrowing base availability and inventory in some of its key supply hubs had virtually run dry.

In July Mercuria stepped in with a $1 billion financial support deal that also saw it take a 30% stake in the bunker company.

An asset purchase agreement filed today reveals that, bar certain vessels, Mercuria now intends to purchase the entire business, with its Stalking Horse baseline valued at $681 million.