MSC’s Aponte to Invest in Rescue of Ferry Operator Moby Group
In a surprise development in the bankruptcy of Moby Lines, the Aponte family that controls MSC and the Onorato family announced they reached an agreement for MSC to make a capital investment in the Italian ferry operator. The Onorato family has been struggling for nearly two years to work out the terms of a recapitalization of the ferry company and was facing an end of March deadline in the process being supervised by an Italian court.
In a brief statement issued late on Thursday by Moby, they said the two families reach an agreement for the capital increase in Moby by the MSC Group. The statement said the investment was aimed at the payment of a debt due to Tirrenia di Navigazione in addition to allowing the prompt reorganization of the Moby Group. Terms were not announced but Shipping Italy is speculating that Aponte could be making an investment for as much as a quarter of Moby. MSC also controls rival ferry operator Grandi Navi Veloci.
A decade ago, Aponte working with Onorato and Grimaldi agreed to acquire rival ferry operator Tirrenia, but the Italian authorities blocked the merger saying they believed it would limit competition among the ferry companies. Onorato’s Moby Group proceeded with the acquisition for which they still have an outstanding debt of nearly $200 million. Moby has a total outstanding debt of more than $700 million.
Moby reached terms with U.S.-based bondholders in January 2022 for the partial reorganization of the company under a prepackaged bankruptcy moving for the filing in the U.S. Under the terms of the agreement, Moby would continue to operate the ferries which would be transferred to a new company owned by the debt holders and in exchange would receive more than $55 million as a cash infusion.
The sticking point, however, was the debt owed by a Moby subsidiary to Tirrenia, which a court in Milan gave Moby till March 30 to reach an agreement for the debt from the acquisition. The subsidiary faced bankruptcy and administration. There had been speculation that the Tirrenia operation might be sold or split apart from Moby.
Moby proposed an 80 percent payment of the debt in four installments between 2023 and 2025. The initial payment would be approximately $25 million, followed annually by two approximately $11 million payments, and a final balloon payment of approximately $110 million. The controlling company, Onorato Armatori, would also secure the deal with mortgages on four of its ferries.
Union leaders responded positively to the news of the investment from MSC Group calling it a positive solution. They welcomed the agreement as a means of saving nearly 6,000 jobs. The unions had recently staged a demonstration at the court over the pending bankruptcy ruling.
The settlement requires approval by the court, but the agreement with Aponte appears to clear the way to complete the restructuring of the Moby Group.