Aegean proposes bidding timeline as Mercuria offers $681m

Says bidding process represents 'best available restructuring alternative' after exploring non-binding proposals.

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Updated on 12 Nov 2018 00:02 GMT

Aegean Marine Petroleum Network Inc. has filed a motion with the US Bankruptcy Court for the Southern District of New York seeking approval of a competitive bidding process which would ultimately result in the sale of the business.

As previously reported, shareholder Mercuria has agreed to serve as the stalking horse bidder in a sale process; and in Friday's motion it was confirmed that the commodity trader's baseline bid is $681m, comprising credit, cash, and assumed liabilities.

Mercuria Asset Holdings (Hong Kong) Ltd is listed as the buyer in the stalking horse asset purchase agreement (APA), and the $681m offer consists of the discharge of all or a portion of the outstanding obligations under the US borrowing base, the global borrowing base and the debtor-in-possession (DIP) financing - equal to $459m; plus $15m in cash; and the assumption of liabilities, representing an estimated value of at least $207m.

The stalking horse bid follows Mercuria's agreement to provide more than $532m in post-petition financing to fund the Chapter 11 process and the company's working capital needs, which was granted on an interim basis at a hearing on November 8.

Aegean submits in the motion that "the proposed marketing process, the Bidding Procedures, and the Stalking Horse APA represent the best available restructuring alternative at this time". This is after it "explored and negotiated alternative transactions predicated on non-binding proposals with other interested parties prior to entering into the Stalking Horse APA".

Discussing the $15m cash offer, Aegean notes that this was negotiated "to ensure these chapter 11 cases can be administered responsibly following the consummation of the Stalking Horse APA transaction".

Aegean has submitted a suggested timeline for the bidding procedures, with February 11 proposed as the deadline by which all offers must be received, and February 18 listed as the possible date of an auction, if one is required.