Contract analysis

I. PRELIMINARY STATEMENT Thalassa Americas Inc. ("TAI" or the "Debtor"), a Delaware C-Corporation and wholly-owned subsidiary of Thalassa Shipping & Logistics Société Anonyme ("TSL"), a Greek société anonyme headquartered at 42 Akti Miaouli, Piraeus 18538, Greece, by and through its proposed counsel, Calderwood & Harkness LLP, respectfully submits this motion (the "Motion") pursuant to sections 105, 361, 362, 363, 36

1. TAI maintains its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010. TAI's federal employer identification number is 84-3291057. TAI's registered agent is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801. TAI operates the U.S.-side shipping operations of TSL's global enterprise, including Houston terminal operations, Jones Act–exempt foreign-flag vessel schedul

2. By this Motion, the Debtor seeks authority to enter into a $75 million superpriority debtor-in-possession credit facility (the "DIP Facility") with Nordbank International AG ("Nordbank"), as DIP administrative agent and collateral agent, and Triton Credit Partners LP ("Triton"), as DIP lender (collectively, the "DIP Lenders"), on the terms and conditions set forth in the DIP Credit Agreement attached hereto as Exh

3. The consequences of failing to obtain the DIP Facility cannot be overstated. Without immediate access to postpetition financing, the Debtor will be unable to operate its business, resulting in irreparable harm to the estate, its creditors, its approximately 680 employees, and the broader communities served by the Debtor's shipping and logistics operations. The Debtor's unrestricted cash position has deteriorated t

4. At the interim hearing (the "Interim Hearing"), the Debtor requests approval of up to $30 million of the $75 million DIP Facility, which amount is necessary to fund the Debtor's operations during the period between the petition date and the final hearing on this Motion (the "Final Hearing"). The Debtor requests that the Final Hearing be scheduled approximately forty-five (45) days after the petition date, at which

5. In addition to the DIP financing itself, this Motion seeks authority to use cash collateral in the ordinary course of business, subject to the DIP Budget (as defined below), and to provide adequate protection to the prepetition secured parties — namely, the syndicate of senior secured lenders (the "Prepetition Senior Secured Lenders") holding approximately $540 million in first-priority secured claims, and Dralvec

6. The factual representations contained herein are supported by the Declaration of Marcus Hale, President of Thalassa Americas Inc., in Support of First-Day Motions, dated January 14, 2023 (the "Hale Declaration"), a copy of which is attached hereto as Exhibit F and incorporated herein by reference.

7. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. TAI maintains its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010, which is located within the Southern District of Texas.

8. The statutory bases for the relief sought herein are sections 105(a), 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, Rules 2002, 4001, and 9014 of the Bankruptcy Rules, and the Local Rules of the United States Bankruptcy Court for the Southern District of Texas.

III. BACKGROUND A. The Debtor's Business and Corporate Structure

9. TSL was founded in 1987 by the Kostandinos family and is a Greek-headquartered private shipping and logistics conglomerate. TSL owns and operates a fleet of 50 vessels, consisting of 38 dry-bulk carriers (comprising 10 Capesize vessels, 14 Panamax vessels, and 14 Supramax vessels) and 12 sub-Panamax container vessels. TSL provides integrated port-to-door logistics services across the Mediterranean, Black Sea, and

10. As of November 1, 2022, TSL's fleet was appraised at $623 million by Drakos Maritime Valuations Ltd. (Captain Nikos Drakos, principal appraiser), a summary of which is attached hereto as Exhibit G. This represents a decline of $268 million, or approximately 30.1%, from the prior appraisal of $891 million as of January 2022, reflecting the precipitous decline in vessel values across the dry-bulk and container ship

11. TAI is a wholly-owned Delaware C-Corporation subsidiary of TSL. TAI was incorporated in 2018 for the purpose of consolidating TSL's U.S.-side operations, including Houston terminal operations, scheduling of Jones Act–exempt foreign-flag vessels serving U.S. ports, and domestic freight brokerage. TAI's operations are integral to TSL's transatlantic trade lane, serving as the primary interface between TSL's fleet a

12. TSL's equity is held as follows: Dimitrios Kostandinos (Chairman of the Board) holds 62%, and Elena Kostandinos-Pavlou (Vice Chairwoman of the Board) holds 18%, for a combined Kostandinos family interest of 80%. These interests are held through KFO Holdings Société Anonyme ("KFO"), a Greek société anonyme registered at 42 Akti Miaouli, Piraeus 18538, Greece — the same address as TSL's headquarters. The remaining

13. TSL's key officers include Georgios Andreadis (Chief Executive Officer), Irini Dalakoura (Chief Financial Officer), and Stavros Papageorgiou (General Counsel — Greece). TAI's key officers include Marcus Hale (President), Diana Restrepo (Vice President, Finance), and Jonathan Kurtz (Vice President, Operations).

14. For the fiscal year ended December 31, 2021, TSL generated consolidated revenue of approximately €1.42 billion. For the fiscal year ended December 31, 2022, TSL's estimated consolidated revenue is approximately €987 million, reflecting a decline of approximately 30.5% year-over-year, driven by the severe downturn in global shipping markets described in further detail below. B. The Prepetition Capital Structure

15. As described below, as of September 30, 2022, the Debtor and its parent are parties to a complex, multi-tranche capital structure with total indebtedness of approximately $847.3 million across secured, mezzanine, unsecured, intercompany, trade, and other obligations.

1. Senior Secured Credit Facility.

16. On June 15, 2019, TSL (as borrower, with TAI as co-borrower for the U.S. Tranche) entered into a senior secured credit agreement (the "Prepetition Credit Agreement") with Nordbank International AG, as administrative agent and collateral agent (in such capacity, the "Prepetition Agent"), and a syndicate of nine lenders (collectively, the "Prepetition Senior Secured Lenders"). Nordbank International AG's principal

17. The Prepetition Credit Agreement provides for a total commitment of $685 million across the following lenders:

18. The Prepetition Credit Agreement is structured in three tranches: (a) Term Loan A ("TLA"): $400 million, amortizing with quarterly principal payments of $10 million. (b) Revolving Credit Facility: $200 million total commitment. (c) U.S. Tranche (Term Loan B, "TLB"): $85 million, non-amortizing with a bullet maturity. TAI is a co-borrower on this tranche.

19. The Prepetition Credit Agreement matures on June 15, 2024. Interest accrues at a rate of SOFR plus 375 basis points, with a default rate of an additional 200 basis points.

20. As of September 30, 2022, the outstanding balances under the Prepetition Credit Agreement are as follows: (a) TLA: $400 million less thirteen quarterly amortization payments of $10 million each (covering the period from the third quarter of 2019 through the third quarter of 2022), resulting in an outstanding balance of $270 million. (b) Revolving Credit Facility: $185 million drawn of the $200 million commitment,

21. The CUSIP number for the TLA is 87265BAA7.

22. The Prepetition Credit Agreement is secured by first-priority liens on (a) 38 dry-bulk carriers, (b) 12 container vessels, (c) the Houston terminal lease, (d) all accounts receivable of the borrowers, and (e) equity interests in TAI and 14 vessel-owning special purpose vehicles (collectively, the "Prepetition Collateral").

23. Concurrent with the Prepetition Credit Agreement, on June 15, 2019, TSL issued mezzanine notes (the "Mezzanine Notes") to Dralvecen Mezzanine Capital LLC ("BMC"), 600 Lexington Avenue, 22nd Floor, New York, New York 10022. BMC's senior relationship officer for this account is Rebecca Marsh, Senior Partner. BMC is represented by Kellner & Foss LLP, 1185 Avenue of the Americas, 30th Floor, New York, New York 10036

24. The Mezzanine Notes bear interest at a rate of 11.5% on a PIK toggle basis. Since the second quarter of 2022, interest on the Mezzanine Notes has been paid entirely in kind (i.e., capitalized to principal). As of September 30, 2022, the outstanding principal balance of the Mezzanine Notes is approximately $112.3 million, consisting of the original $100 million principal amount plus approximately $12.3 million in

25. The Mezzanine Notes are secured by second-priority liens on the same collateral that secures the Prepetition Credit Agreement. The relative priorities, rights, and remedies of the Prepetition Senior Secured Lenders and BMC are governed by an Intercreditor Agreement dated June 15, 2019, between Nordbank (as first-lien agent) and BMC (the "Intercreditor Agreement").

26. On March 1, 2020, TSL issued $50 million in aggregate principal amount of unsecured notes (the "Unsecured Notes"), bearing interest at 8.25% per annum, payable semi-annually on June 1 and December 1. The CUSIP number for the Unsecured Notes is 87265BAB5. The Unsecured Notes mature on March 1, 2025. Garrison Trust Company, 100 Wall Street, 16th Floor, New York, New York 10005, serves as indenture trustee under the

27. An informal group of holders of the Unsecured Notes (the "Informal Noteholder Group") has been formed and is represented by Ashford, Brightmoor Group & McKay PC, 299 Park Avenue, 18th Floor, New York, New York 10171 (Carolyn Brightmoor Group, Lead Partner; Robert Mancini, Associate).

28. On December 1, 2022, TSL failed to make the semi-annual interest payment on the Unsecured Notes in the amount of $2,062,500 (calculated as $50,000,000 × 8.25% ÷ 2). The 30-day cure period under the Unsecured Notes indenture expired on January 1, 2023, and no payment was made. As a result, an event of default has occurred and is continuing under the Unsecured Notes indenture.

29. TAI owes TSL the sum of $76.4 million under a subordinated intercompany promissory note bearing interest at 5.0% per annum (the "Intercompany Note"). The Intercompany Note is subordinated to all external indebtedness of TAI.

30. As of September 30, 2022, TAI had approximately $38.7 million in outstanding trade payables. The largest trade creditor is Olympian Fuel & Supply SA, a bunker fuel supplier located at 7 Iroon Polytechniou, Piraeus 18535, Greece, which is owed approximately $9.2 million.

31. The following table summarizes the Debtor's consolidated indebtedness as of September 30, 2022: C. Events Precipitating the Chapter 11 Filing

32. The Debtor's financial distress is directly attributable to the severe and sustained downturn in global shipping markets during 2022. The Baltic Dry Index ("BDI"), the principal benchmark for dry-bulk shipping rates, declined approximately 58% between January 2022 and September 2022, reflecting a dramatic contraction in demand for dry-bulk shipping capacity.

33. TSL's average daily time-charter equivalent ("TCE") — the key measure of revenue per vessel per day after deducting voyage expenses — fell from $24,800 per day for the full fiscal year 2021 to $11,200 per day for the third quarter of 2022, a decline of approximately 54.8%. This precipitous decline in TCE rates has severely impaired the cash-generating capacity of the fleet and, by extension, TAI's ability to serv

34. On September 15, 2022, the Debtor breached the Minimum Liquidity Covenant under the Prepetition Credit Agreement. Specifically, unrestricted cash fell to $27.3 million against a minimum requirement of $40 million, representing a shortfall of $12.7 million. This breach triggered a cascade of additional default-related consequences under the Prepetition Credit Agreement.

35. As of September 30, 2022, the Debtor was in breach of two additional financial maintenance covenants under the Prepetition Credit Agreement: (a) Maximum Net Leverage Ratio: The covenant requires a Maximum Net Leverage Ratio of 5.50x. As of September 30, 2022, the actual Net Leverage Ratio was 7.82x (Net Debt of $770.9 million ÷ LTM EBITDA of $98.6 million). (b) Minimum Interest Coverage Ratio: The covenant requir

36. On October 10, 2022, following extensive negotiations between the Debtor, TSL, and the Prepetition Agent, the Debtor entered into a Forbearance Agreement with the Prepetition Senior Secured Lender syndicate (with Nordbank acting as agent), pursuant to which the lenders agreed to a 90-day standstill period through January 8, 2023 (the "Forbearance Agreement"). The Forbearance Agreement required, inter alia, that t

37. An Ad Hoc Group of Senior Secured Lenders (the "Ad Hoc Group") was formed in August 2022, comprising Nordbank International AG, Harborstone Bank plc, Triton Credit Partners LP, and Continental Maritime Lending GmbH, holding collectively $372 million in commitments, representing approximately 54.3% of the $685 million Prepetition Credit Agreement. The Ad Hoc Group is represented by Whitfield, Crane & Burgess LLP,

38. On January 8, 2023, the Forbearance Agreement was extended for a period of sixty (60) additional days, through March 8, 2023 (the "Extended Forbearance Period"), to permit the Debtor to continue negotiations with its key stakeholders and, if necessary, to prepare for a Chapter 11 filing on terms that would maximize value for all constituencies.

39. Kensington Veltrian Partners LLC ("KHP"), the Debtor's financial advisor, has estimated the enterprise value of the TSL/TAI combined business at $580 million to $640 million, with a midpoint of $610 million. KHP's analysis indicates that the fulcrum security in the capital structure is the Mezzanine Notes held by BMC. At the midpoint enterprise value of $610 million, the estimated recovery on the Mezzanine Notes

40. As of the anticipated petition date, TAI's unrestricted cash has fallen to critically low levels. As noted above, unrestricted cash was $27.3 million as of September 15, 2022, and has continued to decline since that date as the Debtor has continued to fund operations during the forbearance period with diminishing revenue and constrained working capital. The Debtor's liquidity position is unsustainable absent imme

41. TAI requires immediate access to postpetition liquidity for the following purposes, among others: (a) funding daily vessel operations, including bunker fuel purchases, port fees, pilotage, stevedoring, and logistics services; (b) meeting biweekly payroll obligations for approximately 680 U.S. employees; (c) maintaining the Houston terminal operations, including lease payments, equipment maintenance, and security;

42. Without interim DIP borrowings of at least $30 million, the Debtor will be unable to meet its most immediate obligations within days of the petition date. The failure to fund payroll, vessel operations, and critical vendor payments would result in a rapid and irreversible deterioration of the Debtor's business, the loss of employee talent, the potential arrest of vessels, and the destruction of going-concern valu

43. The Debtor, with the assistance of KHP (James Calloway, Managing Director; 300 Park Avenue, 12th Floor, New York, New York 10022), canvassed the market for DIP financing. KHP contacted potential DIP lenders, including both existing members of the prepetition syndicate and third-party financial institutions, and solicited proposals for debtor-in-possession financing. After evaluating the proposals received, the De

44. In addition, Alderney Management Advisors LLC ("Alderney"), located at 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116, has been engaged on a standby basis to provide Chief Restructuring Officer ("CRO") services to the Debtor. The CRO designee is Richard "Rick" Thornberg, a seasoned restructuring professional with extensive experience in the shipping and logistics sector. If the Chapter 11 filing pr

IV. SUMMARY OF THE DIP FACILITY

45. The following is a summary of the material terms and conditions of the DIP Facility. This summary is qualified in its entirety by reference to the DIP Credit Agreement attached hereto as Exhibit C and the DIP Term Sheet attached hereto as Exhibit D. Capitalized terms used in this Section and not otherwise defined herein have the meanings ascribed to them in the DIP Credit Agreement. A. DIP Parties

46. The principal parties to the DIP Facility are as follows: (a) DIP Borrower: Thalassa Americas Inc. (b) DIP Administrative Agent and Collateral Agent: Nordbank International AG, Bahnhofstrasse 78, 8001 Zürich, Switzerland. (c) DIP Lenders: Nordbank International AG and Triton Credit Partners LP, 399 Park Avenue, 14th Floor, New York, New York 10022.

47. The Debtor acknowledges that Nordbank serves in a dual capacity as both the Prepetition Agent (holding $137 million of the $685 million Prepetition Credit Agreement) and the proposed DIP Agent and DIP Lender. Similarly, Triton is both a Prepetition Senior Secured Lender (with a $68 million commitment under the Prepetition Credit Agreement) and a proposed DIP Lender. Such dual-role arrangements are common and well

48. The total commitment under the DIP Facility is $75,000,000. The DIP Facility is structured as a superpriority secured debtor-in-possession credit facility. Upon entry of the Interim Order, up to $30,000,000 of the DIP Facility shall be available for borrowing (the "Interim DIP Amount"). The remaining commitment, up to the full $75,000,000, shall become available upon entry of the Final Order, which the Debtor ant

49. Borrowings under the DIP Facility bear interest at a rate of SOFR plus 600 basis points. A commitment fee of 0.50% per annum applies to undrawn commitments under the DIP Facility. In the event of a default under the DIP Credit Agreement, the default rate shall apply, which adds a customary 200 basis points to the otherwise applicable interest rate. Additional customary fees, including a closing fee and an upfront

50. The DIP Facility matures on the date that is twelve (12) months from the closing date, unless earlier terminated upon the occurrence of certain termination events (including events of default and acceleration events) or upon the effective date of a plan of reorganization confirmed in this Chapter 11 case. E. Security and Priority