General Maritime’s future hangs in balance

The fate of one of the world’s largest oil tanker owners remained unclear on Wednesday ahead of the expiry on Thursday of waivers allowing New York-listed General Maritime to breach a series of clauses in its banking covenants.

The future of the company, which was last week forced to issue only partial third-quarter results and cancel a planned conference call with investors amid uncertainty over its finances, is likely to depend on Oaktree, the private equity fund, and a group of bondholders.

In April, Oaktree invested $200m in an issue of convertible bonds as General Maritime struggled to cope with a slump in tanker earnings and its heavy debt burden. The fund could make a further investment, according to shipping industry figures.

However, the stance of holders of a $300m unsecured bond issued in 2009 could also prove crucial. The bondholders have appointed New York’s Perella Weinberg to advise them over any restructuring, while General Maritime has appointed Moelis & Company.

If the company’s banks refuse to grant an extension to the waivers, granted on October 3 and General Maritime were forced to seek bankruptcy protection, it would be the highest-profile victim so far of a slump in oil tanker rates .