With the sale of its full shareholding in the company Rickmers Trust Management Pte. Ltd. on 17 October 2016 and the associated separation of equity participation and executive management function, the criterion of control in the sense of IFRS 10 and also § 290 HGB (German Commercial Code) is from this moment no longer fulfilled for Rickmers Maritime nor for Rickmers Trust Management Pte. Ltd. In view of this, a transitional consolidation of the Rickmers Maritime is to be undertaken, with the objective of transitioning from a fully consolidated company to one valued according to the equity method. Within this, in accordance with IFRS 10.25 the assets and debt held by Rickmers Maritime are to be derecognised and the retained shareholding of currently 34.2 per cent in Rickmers Maritime is to be recognised at fair value. Additionally, the company Rickmers Trust Management Pte. Ltd. is to be deconsolidated through the sale of all shareholdings. A detailed report on all material impacts of this move on the Group’s income, financial and asset situation will be published in the Rickmers Holding AG Annual Report 2016, which is planned for publication latest by 30 April 2017.
Due to the merger of Rickmers Holding GmbH & Cie. KG, Hamburg, with Pacific Holdings International GmbH & Cie. KG, Hamburg, and the consequent pooling of the equity participation in Rickmers Maritime amounting to 33.1 percent, with effect from 23 April 2012 the stock exchange-listed Shipping Trust Rickmers Maritime, Singapore, was fully consolidated for the first time with the parent company publishing the Group’s balance sheet (today Rickmers Holding AG, previously Rickmers GmbH & Cie. KG, Hamburg). Within this move it was borne in mind that all major decisions concerning Rickmers Maritime are to be taken by the Executive Board Members of Rickmers Maritime. In turn, responsibility for the appointment and dismissal of Executive Board Members lies with the Trust Manager (Rickmers Trust Management Pte. Ltd), whose shares were fully owned up to 17 October 2016 by Rickmers First Invest GmbH (a direct subsidiary of Rickmers Holding AG, previously operating as Rickmers Holding GmbH & Cie. KG).
Will the sale of the full shareholding in the company Rickmers Trust Management Pte. Ltd., Singapore, have an effect on the bank financing of the Rickmers Group?
The sale of the full shareholding in the company Rickmers Trust Management Pte Ltd., the consequent transitional consolidation of Rickmers Maritime and the deconsolidation of Rickmers Trust Management Pte. Ltd. were undertaken with all due preparation and with the close involvement of all the Rickmers Group’s relevant core banking partners amongst other parties, which also included the Group’s auditors in view of the consequences for the Group’s balance sheet. The terms and conditions of relevant credit agreements have been upheld or waived. Furthermore, in a move to counter the weak shipping markets amongst other factors, on 4 March 2016 the Rickmers Group approved a package of measures which was subsequently further developed (see the Annual Report 2015) and is continued to be implemented. In this regard, refinancing negotiations amongst other discussions are currently underway with the Group’s core banking partners in order to agree a repayment profile that better reflects the prevailing overall market situation, amongst other objectives. The Rickmers Group had already submitted the corresponding requests on 24 August 2016 (see Half-Year Report 2016).
To what extent does the sale of the full shareholding in the company Rickmers Trust Management Pte. Ltd., Singapore, affect the conditions of the Rickmers Bond (2013/2018 ISIN DE000A1TNA39, WKN/German Securities Code A1TNA3, ticker symbol RC1H) issued by Rickmers Holding AG?
As a result of the sale of its full shareholding in the company Rickmers Trust Management Pte. Ltd., Rickmers Maritime is no longer a ‘Material Subsidiary’ of Rickmers Holding AG as defined in the Terms and Conditions of the Rickmers Bond 2013/2018 (ISIN DE000A1TNA39, WKN/German Securities Code A1TNA3, ticker symbol RC1H) listed in the Prime Standard of the Frankfurt Stock Exchange. Insofar as the Terms and Conditions of the Bond are affected by the company’s status as ‘Material Subsidiary’, as is the case in § 7 ‘Events of Default’, Rickmers Maritime and the multicurrency medium-term note (MTN) programme issued in Singapore by Rickmers Maritime, as well as the SGD 100 million-dollar tranche placed in relation to this, are no longer relevant.