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SOURCE NewLead Holdings Ltd.
PIRAEUS, Greece, June 26, 2014 /PRNewswire/ -- On June 18, 2014, NewLead Holdings Ltd. (NASDAQ: NEWL) ("NewLead" or the "Company") announced that the Company satisfied its obligations under the $44.8 million court ordered settlement agreement (referred to in the prior press release as a "balance sheet program") with MG Partners Limited ("MGP") and Hanover Holdings I, LLC ("Hanover"), all as more fully described in NewLead's current reports on Form 6-K, as initially filed on December 2, 2013 and through June 26, 2014 with respect to such court ordered settlement dated December 2, 2013 (the "Order"). The Order was in accordance with a stipulation of settlement (the "Settlement Agreement") among NewLead, MGP and Hanover, in the matter entitled Hanover Holdings I, LLC v. NewLead Holdings Ltd., Case No. 160776/2013 (the "Action"). Hanover commenced the Action against the Company on November 19, 2013 to recover an aggregate of $44,822,523.85 of past-due indebtedness of the Company which Hanover had purchased (and validly assigned to MGP) from certain creditors of the Company.
The Order provides for the full and final settlement of the Action, which shall be deemed to be satisfied upon the issuance of common shares as settlement shares until MGP received aggregate cash proceeds from the resale of such settlement shares equal to the sum of approximately $61.6 million, representing 137.5% of the total amount of the Action, plus certain additional "true-up" shares pursuant to a formula set forth in the Settlement Agreement. To satisfy its obligations under the Settlement Agreement, NewLead issued an aggregate of 38,437,604 (adjusted to give effect to the 1-for-10 and 1-for-50 reverse stock splits, effective March 6, 2014 and May 15, 2014, respectively, or approximately 19.2 billion shares not giving effect to the reverse splits) common shares. In addition, the number of Company's common shares outstanding prior to the first issuance of common shares to MGP was 15.8 million shares. Not giving effect to the reverse stock splits, the number of the Company's current common shares outstanding would be approximately 72.27 billion shares.
As previously reported, on December 2, 2013, on Form 6-K on the same date, the Supreme Court of the State of New York, County of New York entered the Order approving, among other things, the fairness of the terms and conditions of the Settlement Agreement, by which the Company issued shares to extinguish outstanding obligations related to one newbuilding 35,000 dwt eco-type geared double hull Handysize dry bulk vessel (the "Vessel"), a coal wash plant in Kentucky, USA (the "Coal Wash Plant") and a mine (the "Five Mile mine"), that includes a CSX rail load facility, the Andy Rail Terminal, in Kentucky, USA, all of which assets have been previously reported on.
With respect to the Vessel, as announced on December 4, 2013, the purchase price of such vessel was $19.5 million, a portion of which was previously paid and the past-due balance of $13.1 million is being paid by MPG in accordance with the agreement with the original claim holder by which the claim for such past-due amount was purchased. Delivery of the vessel is expected in late July or early August 2014. As previously announced on December 18, 2013, the acquisition of the Coal Wash Plant was completed in December 2013. For the Five Mile mine, as previously announced on January 9, 2014, NewLead currently has access and development rights to such mine and the outstanding past-due amounts owed to the original debt holders of approximately $1.7 million is being paid by MPG in accordance with the agreements with the original debt holders by which such past-due debt was purchased. After all payments have been made, NewLead intends to undertake the process necessary to effect transfer of title to the Five Mile mine, which it expects to conclude the transfer prior to the end of 2014.
Mr. Michael Zolotas, Chairman and Chief Executive Officer of NewLead, stated: "We are delighted to have completed this Settlement Agreement in just over six months. The payment of the debt obligations associated with the assets and other secured and unsecured liabilities through the Settlement Agreement approved by the court assisted in the development of a vertically integrated shipping and commodity company. NewLead is ready to move forward with an enhanced balance sheet having now satisfied all of its obligations under the court ordered Settlement Agreement."
About NewLead Holdings Ltd.
NewLead Holdings Ltd. is an international, vertically integrated shipping, logistics and commodity company. NewLead owns three dry bulk vessels, one Handysize vessel and two Panamax vessels and manages three third party tanker vessels, two small bitumen tanker vessels and one Handysize MR product tanker. The Company took delivery of one of the three modern eco-type dry bulk Handysize vessels, the Newlead Albion on May 19, 2014 and expects to take delivery of the other two, one of which is newbuilding, between July and August 2014. The Company has also signed a term sheet for 75% financing to acquire two dry bulk Panamax vessels. Upon completion of the above acquisitions and together with the vessels under management. NewLead is expected to have a fleet of ten vessels, seven owned and three vessels under management. Furthermore, the Company owns a wash plant and a mine in Kentucky, USA and has been granted access to develop and mine another mine, that includes a CSX rail load facility, the Andy Rail Terminal, in Kentucky, USA. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. To learn more about NewLead Holdings Ltd., please visit the new website at www.newleadholdings.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
This press release includes assumptions, expectations, projections, intentions and beliefs about future events. These statements, as well as words such as "anticipate," "estimate," "project," "plan," and "expect," are intended to be ''forward-looking" statements. We caution that assumptions, expectations, projections, intentions and beliefs about future events may vary from actual results and the differences can be material. Forward-looking statements include, but are not limited to, such matters as the creditworthiness of our counterparties, the reliability of reserve reports, our ability to extract or acquire coal to fulfill contracts, the consummation of conditional contracts, future operating or financial results; our liquidity position and cash flows, our ability to borrow additional amounts under our revolving credit facility and, if needed, to obtain waivers from our lenders and restructure our debt, and our ability to continue as a going concern; statements about planned, pending or recent vessel disposals and/or acquisitions, business strategy, future dividend payments and expected capital spending or operating expenses, including dry-docking and insurance costs; statements about trends in the product tanker and dry bulk vessel shipping segments, including charter rates and factors affecting supply and demand; expectations regarding the availability of vessel acquisitions; completion of repairs; length of off-hire; availability of charters; and anticipated developments with respect to any pending litigation. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although NewLead believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, NewLead cannot assure you that it will achieve or accomplish these expectations, beliefs or projections described in the forward looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter rates and vessel values, failure of a seller to deliver one or more vessels, and other factors discussed in NewLead's filings with the U.S. Securities and Exchange Commission from time to time. NewLead expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in NewLead's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
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