PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Robert Adeyemi, Responsible Partner, Capital Markets, Calderwood & Harkness LLP
FROM: Brendan Walsh, Lead Associate, Capital Markets, Calderwood & Harkness LLP
DATE: December 1, 2022 (Updated: September 8, 2023)
RE: Dormancy Memorandum — Thalassa Shipping & Logistics SA — $400,000,000 Senior Secured Notes due 2029
Matter No.: 1044-00004
Client No.: 80214-TSL
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I. Purpose and Summary
The purpose of this memorandum is to memorialize the current dormant status of the above-referenced matter, to provide a comprehensive inventory of the near-final documentation suite prepared in connection with the proposed offering, to summarize the reasons for shelving the transaction, and to identify the specific steps and workstreams that would be required for reactivation should market conditions improve and Thalassa Shipping & Logistics SA ("TSL" or the "Issuer") elect to proceed.
This matter was coded dormant in the Calderwood & Harkness LLP ("C&H") time and billing system as of December 1, 2022, following the formal suspension notice issued by TSL to Anchor Bay Securities LLC ("ABS") on November 14, 2022. The suspension notice, which was drafted by this office and signed by Spyros Andreou, Chief Executive Officer of TSL, reserved TSL's right to reactivate the offering at a future date without prejudice to the rights of any party under the near-final transaction documentation.
This memorandum was originally prepared as of December 1, 2022. The September 8, 2023 update, reflected throughout this memorandum, confirms that the matter remains in dormant status. TSL management confirmed that no reactivation timeline has been established as of the periodic check-in conducted on March 15, 2023, and again at the annual review conducted on September 8, 2023. During both check-ins, Spyros Andreou (CEO) and Marina Demetriou (CFO) indicated that TSL continues to monitor freight market conditions and the Baltic Dry Index (the "BDI") but is not prepared to commit to a relaunch timeline at this time. No material changes to TSL's corporate structure, fleet composition, or key personnel have been reported during the dormancy period.
This memorandum is intended to serve as the definitive reference document for the matter file, enabling any attorney or team member who may be assigned to the matter upon reactivation to quickly familiarize themselves with the transaction structure, the status of each document, the reasons for shelving, and the steps required to bring the offering back to market. All capitalized terms used but not otherwise defined in this memorandum have the meanings given to them in the near-final Indenture (5th Draft, dated September 6, 2022).
II. Transaction Overview
A. The Offering
The proposed transaction involved the issuance and sale of $400,000,000 in aggregate principal amount of Senior Secured Notes due 2029 (the "Notes"). The offering was structured as a private placement exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), conducted pursuant to Rule 144A and Regulation S thereunder. The following summarizes the key terms of the offering as reflected in the near-final documentation suite:
Co-Issuers. The Notes were to be co-issued by (i) Thalassa Shipping & Logistics SA, a Greek société anonyme registered with the General Commercial Registry (GEMI) under No. 148276201000 and headquartered at 42 Akti Miaouli, Piraeus 185 35, Greece ("TSL"), and (ii) Thalassa Finance Pte. Ltd., a Singapore private company limited by shares with Unique Entity Number (UEN) 202209345K and registered at 8 Marina Boulevard, #36-02, Marina Bay Financial Centre Tower 1, Singapore 018981 ("TFPL" and, together with TSL, the "Co-Issuers"). TFPL is a wholly-owned special purpose vehicle of TSL, established for the purpose of this offering, with Marina Demetriou (CFO of TSL) serving as its sole director.
Coupon. The Notes bore an indicative coupon of 8.750% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2023 (assuming an October 15, 2022 settlement date).
Issue Price. The Notes were to be issued at a price of 98.00% of par, reflecting original issue discount ("OID") of 2.00%, or $8,000,000 in aggregate.
Yield to Maturity. The indicative yield to maturity was approximately 9.12%, reflecting the combination of the 8.750% coupon and the 2.00% OID over the seven-year tenor.
Maturity. October 15, 2029, representing a seven-year tenor from the originally targeted settlement and closing date of October 15, 2022.
Denominations. Minimum denomination of $200,000 and integral multiples of $1,000 in excess thereof.
Structure and Distribution. Rule 144A offering to qualified institutional buyers ("QIBs") in the United States and concurrent Regulation S offering to non-U.S. persons outside the United States. The Notes were to be represented by global notes deposited with (i) The Depository Trust Company ("DTC") in the case of the Rule 144A Global Note, and (ii) a common depositary for Stonefield Industries ("Thackeray Partners LLC") and Harborview Industries ("Ashgrove Enterprises") in the case of the Regulation S Global Note.
Governing Law. The Indenture and related transaction documents were governed by the laws of Singapore.
Listing. TSL intended to apply for listing of the Notes on the Singapore Exchange Securities Trading Limited ("SGX-ST"). The listing application was never completed or submitted prior to the suspension of the offering.
Proposed Identifiers (Never Activated). The following identifiers were provisionally assigned but were never activated:
These identifiers should be confirmed as available or reassigned upon any reactivation of the offering.
B. Key Parties
The following is a comprehensive list of the key parties to the transaction, their roles, and the principal individuals involved in the working group:
Issuer / Client: Thalassa Shipping & Logistics SA. TSL is a Greek société anonyme (GEMI No. 148276201000) operating a diversified maritime fleet of 50 vessels, consisting of 38 dry-bulk carriers (comprising Supramax, Ultramax, and Kamsarmax class vessels) and 12 container feeder vessels. In addition to its core vessel operations, TSL maintains integrated port logistics and freight-forwarding services. TSL's primary trade lanes encompass the Eastern Mediterranean, Black Sea, and Southeast Asia routes. The company was founded in 1997 by the Kallistratos family and remains under family control through Kallistratos Maritime Holdings Ltd.
Co-Issuer: Thalassa Finance Pte. Ltd. TFPL is a wholly-owned Singapore special purpose vehicle of TSL (UEN 202209345K) established for the purpose of co-issuing the Notes. Its sole director is Marina Demetriou, who also serves as CFO of TSL. TFPL has no independent operations and serves exclusively as the Singapore-incorporated co-issuer.
Controlling Shareholder: Kallistratos Maritime Holdings Ltd. Kallistratos Maritime Holdings Ltd. ("KMH") is a British Virgin Islands company that holds 72.5% of the equity of TSL. The ultimate beneficial owner of KMH is Dimitrios Kallistratos, who serves as Chairman of the TSL board of directors. KMH was to provide a limited parent guarantee under the Notes, capped at $50 million.
Minority Sponsor: Pelagos Capital Partners Fund III LP. Pelagos Capital Partners Fund III LP ("Pelagos") is a Cayman Islands limited partnership that holds 18.0% of the equity of TSL. The managing partner of Pelagos is Andreas Vournas. Under the terms of Pelagos's shareholders' agreement with KMH and TSL, Pelagos holds observer rights with respect to the Notes documentation. Pelagos participated in certain working group calls during the active phase of the transaction but did not have approval rights over the terms of the Notes.
Management ESOP. The remaining 9.5% of TSL's equity is held through a management equity stock ownership plan.
Guarantor Subsidiaries. The following wholly-owned subsidiaries of TSL were to provide upstream guarantees under the Notes:
(i) Thalassa Dry Bulk Operations Ltd., a company organized under the laws of Malta;
(ii) Thalassa Container Feeder Ltd., a company organized under the laws of the Republic of the marshall Islands;
(iii) Thalassa Port Services FZCO, a free zone company organized under the laws of the Emirate of Dubai, United Arab Emirates; and
(iv) Thalassa Freight Solutions Pte. Ltd., a private company limited by shares organized under the laws of Singapore.
Each Guarantor Subsidiary is a fleet-owning or operations entity within the TSL group and holds title to certain of the Collateral Vessels or manages port logistics and freight-forwarding activities on behalf of the group.
Lead Bookrunner / Initial Purchaser: Anchor Bay Securities LLC. ABS is a Delaware limited liability company and served as the lead bookrunner and initial purchaser for the offering. The principal contacts at ABS were Marcus Reinhardt (Managing Director, Head of Shipping & Transportation Debt Capital Markets), Priya Subramanian (Director), and David Loh (Vice President, Singapore DCM). ABS was entitled to 65% of the Initial Purchaser discount, amounting to $5,200,000 (based on the total OID of $8,000,000).
Co-Manager / Initial Purchaser: Halcyon Partners International Ltd. Halcyon Partners International Ltd. ("HPI") is a company organized under the laws of England and Wales and served as co-manager and initial purchaser. The principal contacts at HPI were James Ogilvie (Managing Director) and Sophie Chen (Director). HPI was entitled to 35% of the Initial Purchaser discount, amounting to $2,800,000.
Indenture Trustee: Marlowe Asset Management Trust Company of Singapore Pte. Ltd. Marlowe Asset Management Trust Company of Singapore Pte. Ltd. ("VTC"; UEN 199804782D) was appointed as indenture trustee under the Indenture. The principal contact at VTC was Richard Tan (Vice President, Corporate Trust).
Security Agent / Collateral Agent: Atlas Collateral Agency Pte. Ltd. Atlas Collateral Agency Pte. Ltd. ("ACA"; UEN 200115678R) was appointed as security agent and collateral agent for the benefit of the holders of the Notes. The principal contact at ACA was Karen Ng (Assistant Director, Collateral Services).
Initial Purchasers' Counsel: Whitfield & Crane LLP. Whitfield & Crane LLP ("W&C") served as counsel to ABS and HPI. The principal contacts at W&C were Thomas Whitfield III (Partner) and Rebecca Samuels (Senior Associate). W&C was responsible for preparing the initial purchasers' comments on the Indenture and Offering Memorandum, the 10b-5 disclosure letter framework, and related matters.
Trustee's Counsel: Thornton Ashworth LLP. Thornton Ashworth LLP served as counsel to VTC. The principal contact was Michelle Goh (Partner).
Greek Local Counsel: Delphi & Karidis LLP. Delphi & Karidis LLP served as Greek local counsel to TSL for purposes of the offering, providing advice on Greek corporate law, GEMI registration, and the enforceability of TSL's obligations under Greek law. The principal contact was Nikolaos Karidis (Senior Partner).
Singapore Local Counsel: Rajendra & Osman LLP. Rajendra & Osman LLP served as Singapore local counsel to TSL and TFPL, providing advice on ACRA compliance, Singapore corporate law, and the enforceability of TFPL's obligations and the Singapore-law governed transaction documents. The principal contact was Anil Rajendra (Managing Partner).
Auditor / Comfort Letter Provider: Kestrel & White Chartered Accountants. Kestrel & White Chartered Accountants ("K&W") served as independent auditor of TSL and was engaged to provide a comfort letter under SAS 72 / ISAE-equivalent standards. The principal contact was Georgios Papadimitriou (Audit Partner).
Fleet Appraiser: Compass Marine Valuations Ltd. Compass Marine Valuations Ltd. ("CMV") provided the independent fleet appraisal dated June 2022 that was referenced in the near-final Offering Memorandum. The principal contact was Robert Hargreaves (Managing Director).
Rating Agencies. Two credit rating agencies provided preliminary ratings for the Notes:
(i) Polaris Ratings Group Ltd. — Carl Johansson (Lead Analyst); and
(ii) Oceanic Credit Assessments Inc. — Linda Park (Senior Director).
Existing Lenders (to be Refinanced). The proceeds of the offering were to be used in part to refinance two existing bilateral facilities:
(i) Meridian Maritime Bank AG — $190,000,000 facility; principal contact Hans-Peter Gerber; and
(ii) Clearwater Shipping Finance Ltd. — $120,000,000 facility; principal contact Emma Blackwood.
C. Key TSL Personnel
The following individuals constituted the principal management contacts at TSL for purposes of the offering:
D. Calderwood & Harkness Engagement Team
Calderwood & Harkness LLP was engaged as issuer's counsel. The engagement team consisted of the following attorneys:
The engagement letter was signed on June 13, 2022, by Spyros Andreou on behalf of TSL and Robert Adeyemi on behalf of C&H. The engagement contemplated total estimated fees of $2,400,000 at a blended hourly rate of approximately $1,050 per hour, representing approximately 2,285 estimated hours of attorney time across the engagement team. The engagement letter included standard provisions regarding billing procedures, expense reimbursement, and conflict waivers.
E. Use of Proceeds
The estimated use of proceeds from the offering, as reflected in the near-final Offering Memorandum, was as follows:
The refinancing of the two existing bilateral facilities represented the primary use of proceeds, accounting for $310,000,000 (77.5%) of the total. Upon closing, both the Meridian Maritime Bank AG facility and the Clearwater Shipping Finance Ltd. facility would have been repaid in full and the related security interests released, with the Collateral Vessels and other assets securing those facilities then becoming available to secure the Notes.
F. Key Financial Metrics (as Reflected in Near-Final OM, Q1 2022 Annualized)
The following key financial metrics were presented in the near-final Offering Memorandum based on TSL's audited FY2021 financial statements and Q1 2022 annualized interim data, and were subject to the comfort letter procedures to be performed by K&W:
These metrics reflected a period of historically elevated freight rates, particularly in the dry-bulk market. As discussed in Section IV below, the subsequent deterioration in freight rates materially impacted the forward-looking EBITDA outlook and was a principal factor in the decision to shelve the offering.
G. Security Package Summary
The Notes were to be secured by a comprehensive first-priority security package administered by Atlas Collateral Agency Pte. Ltd. as Security Agent, consisting of the following:
(i) First-priority ship mortgages over 28 Collateral Vessels, with an aggregate appraised value of $1.175 billion as of June 2022 (per the CMV appraisal). The ship mortgages were to be governed by the laws of the relevant flag states and were to be registered in the applicable ship registries;
(ii) First-priority assignment of earnings, insurances, and requisition compensation with respect to each Collateral Vessel, including all charter hire, freight revenue, demurrage, insurance proceeds, and requisition compensation;
(iii) First-priority pledge over 100% of the equity of TFPL and each fleet-owning Guarantor Subsidiary (Thalassa Dry Bulk Operations Ltd., Thalassa Container Feeder Ltd., Thalassa Port Services FZCO, and Thalassa Freight Solutions Pte. Ltd.);
(iv) First-priority assignment of intercompany loan receivables in the aggregate amount of $365 million from TFPL to the fleet-owning Guarantor Subsidiaries.
The Security Agent was Atlas Collateral Agency Pte. Ltd. (UEN 200115678R; contact: Karen Ng, Assistant Director, Collateral Services). All security documents were prepared in near-final or form-agreed status as described in the Document Inventory at Section V below.
H. Guarantee Structure
The Notes were to benefit from the following guarantee structure:
(i) upstream guarantees from each Guarantor Subsidiary — namely, Thalassa Dry Bulk Operations Ltd. (Malta), Thalassa Container Feeder Ltd. (Marshall Islands), Thalassa Port Services FZCO (Dubai), and Thalassa Freight Solutions Pte. Ltd. (Singapore). Each guarantee was unconditional and irrevocable, subject to customary limitation language to address financial assistance, corporate benefit, and thin capitalization restrictions under the applicable local law of each Guarantor Subsidiary; and
(ii) A limited parent guarantee from Kallistratos Maritime Holdings Ltd. (BVI), capped at $50,000,000. The limited cap was negotiated at the request of KMH and Pelagos Capital Partners, reflecting the desire of the controlling shareholder to limit the recourse available to Noteholders against the parent holding company. The Indenture provided that the KMH limited guarantee would automatically terminate upon any Change of Control (as defined in the Indenture) in which KMH ceases to be the controlling shareholder.
I. Key Covenant Terms (Near-Final Indenture)
The near-final Indenture (5th Draft, dated September 6, 2022) contained the following key covenants, which were substantially agreed among all parties:
Incurrence-Based Leverage Test. The Co-Issuers and Restricted Subsidiaries were permitted to incur additional Indebtedness only if, on a pro forma basis after giving effect to such incurrence, the Total Net Leverage Ratio did not exceed 3.50x. This was an incurrence-based test only and was not a maintenance covenant.
Restricted Payments Basket. The aggregate amount of Restricted Payments (including dividends, distributions, and investments not otherwise permitted) was limited to the greater of (i) $30,000,000 and (ii) 10% of Consolidated Net Tangible Assets as of the most recently ended fiscal quarter for which financial statements are available.
Maintenance Collateral Coverage Ratio. The Co-Issuers were required to maintain a minimum collateral coverage ratio of 2.00x at all times, tested semi-annually based on updated vessel appraisals. If the ratio fell below 2.00x, the Co-Issuers were required to either (a) provide additional collateral sufficient to restore the ratio or (b) make an offer to repurchase Notes in an amount sufficient to restore compliance.
Asset Sale Proceeds. One hundred percent (100%) of net proceeds from any Asset Sale in excess of $15,000,000 per transaction (or series of related transactions) were required to be applied to an offer to repurchase the Notes at 100% of par within 365 days following the consummation of such Asset Sale, unless reinvested in Replacement Assets within such 365-day period.
Change of Control Put. Upon the occurrence of a Change of Control, the Co-Issuers were required to make an offer to repurchase all outstanding Notes at a price of 101% of par, plus accrued and unpaid interest.
Optional Redemption. The Notes were subject to optional redemption on the following terms:
(a) Make-Whole Redemption (Years 1–3): At any time during the first three years after the Issue Date, the Notes were redeemable at a make-whole price equal to the greater of (x) 100% of principal and (y) the present value of all remaining scheduled payments of principal and interest, discounted at the applicable Treasury Rate plus 50 basis points, plus accrued and unpaid interest;
(b) Fixed-Price Call Schedule (Years 4–6+):
(c) Equity Clawback: Up to 40% of the original aggregate principal amount of the Notes were redeemable at 108.750% of par within 180 days of the consummation of an initial public offering of equity securities of TSL, using the net cash proceeds of such offering; provided that at least 60% of the original aggregate principal amount of the Notes remained outstanding after such redemption.
J. Preliminary Ratings
Two credit rating agencies assigned preliminary ratings to the Notes prior to the suspension of the offering:
Both ratings were placed on hold following the announcement of the offering's postponement. As of the September 8, 2023 update, neither agency has withdrawn the preliminary rating; both remain on hold status. Reactivation of the offering will require re-engagement with both agencies and updated financial presentations, as discussed further in Section VII.B below.
III. Chronology of Events
The following chronology details the significant milestones in the transaction from initial engagement through dormancy coding, as well as the subsequent periodic check-ins during the dormancy period:
IV. Reasons for Shelving
The offering was postponed and ultimately shelved due to a confluence of adverse market conditions and deteriorating financial fundamentals that rendered the transaction uneconomic at terms acceptable to TSL's board of directors. The principal factors are summarized below.
A. Baltic Dry Index Collapse
The BDI, which is the benchmark index tracking spot freight rates for the global dry-bulk shipping market and is a key indicator of vessel earnings for TSL's 38-vessel dry-bulk fleet, experienced a severe and sustained decline during the period in which the offering was being prepared for launch. The BDI fell from approximately 3,400 in May 2022 — a level that supported the robust financial metrics presented in the near-final Offering Memorandum — to below 1,200 by late October 2022, representing a decline of approximately 65% over a six-month period.
The decline in the BDI was driven by a combination of macroeconomic factors, including slowing global trade volumes, reduced Chinese commodity import demand, and an oversupply of dry-bulk tonnage entering the market. The impact on TSL's fleet was particularly acute in the Supramax and Ultramax classes, which constitute the majority of TSL's dry-bulk fleet. Projected charter rates for TSL's Supramax and Ultramax vessels compressed by approximately 40–55% relative to the rates prevailing during Q1 2022, which had served as the basis for the annualized financial data in the Offering Memorandum.
The BDI decline directly undermined the earnings and cash flow projections that underpinned the credit story presented to the rating agencies and that would have been the basis for investor marketing during the roadshow.
B. Deterioration in EBITDA Outlook
As a direct consequence of the freight rate compression described above, TSL's forward-looking Adjusted EBITDA estimate for FY2023 declined materially from the $214.6 million figure (based on Q1 2022 annualized data) that was used in the near-final Offering Memorandum to approximately $128 million, representing a decline of approximately 40%.
On a pro forma basis reflecting the revised EBITDA estimate, the key credit metrics would have deteriorated as follows:
While the revised pro forma net leverage of approximately 2.67x would still have been within the 3.50x incurrence covenant threshold, the deterioration from the 1.59x ratio presented in the near-final OM was significant and would have been viewed negatively by investors. Moreover, the compression of interest coverage from 6.13x to approximately 3.66x raised concerns about debt serviceability in a further-deteriorating rate environment.
C. Repricing Risk
In connection with the second postponement on October 3, 2022, ABS and HPI provided updated pricing guidance to TSL management. Both initial purchasers advised that the offering would need to be repriced from the indicative 8.750% coupon to approximately 10.50–11.00% in order to clear the market in the deteriorated environment. This repricing would have reflected both (i) the widening of high-yield shipping spreads generally and (ii) the issuer-specific deterioration in TSL's earnings outlook.
At the midpoint of the repriced range (10.75%), the annual interest expense on $400 million of Notes would have been approximately $43.0 million, compared to the $35.0 million at the original indicative coupon — an increase of $8.0 million per annum. Against the revised EBITDA estimate of approximately $128 million, the repriced interest coverage would have been approximately 2.98x, a level that TSL's board of directors (including Chairman Dimitrios Kallistratos) considered unacceptably thin.
The TSL board concluded that the repriced economics — combining wider spreads, higher interest expense, reduced EBITDA, and uncertain investor appetite — were unacceptable and that it was preferable to delay the offering until market conditions improved. This decision was communicated to ABS and C&H and was formalized through the suspension notice issued on November 14, 2022.
D. Rating Agency Actions
Both Polaris Ratings Group Ltd. and Oceanic Credit Assessments Inc. placed their respective preliminary ratings on hold in early November 2022 (November 2 and November 4, 2022, respectively). While these actions were procedural responses to the indefinite postponement of the offering rather than credit downgrades, they effectively confirmed the impracticability of proceeding with the offering and would have complicated any last-minute decision to launch. The preliminary ratings remain on hold as of the September 8, 2023 update to this memorandum.
V. Document Inventory — Near-Final Suite
Set forth below is a comprehensive catalogue of all documents prepared or substantially negotiated in connection with the offering. Each document is identified by category, title, draft version, date of most recent draft, and current status. The status designations used are as follows:
• Fully Executed — Document was signed and delivered by all parties.
• Near-Final — Document was substantially agreed among the relevant parties and required only minor conforming changes, updated dates, or execution to be complete.
• Form Agreed — Form of document was agreed and would have been completed with transaction-specific details at or prior to closing.
• Draft — Document was in active negotiation or preparation but had not reached near-final status.
• Completed — Internal memorandum or administrative document that was finalized.
• Sent — Correspondence or notice that was transmitted to the recipient.
• Suspended — Document or checklist that was suspended upon shelving of the transaction.
• Assembled, Unexecuted — Signature pages or closing deliverables that were prepared but never signed.
All documents are maintained in the C&H document management system under Matter No. 1044-00004. Electronic copies of all documents in the list below are accessible through the C&H matter file. Hard copies of certain executed documents (principally the engagement letter) are maintained in the physical matter file.
A. Engagement & Internal Administration
Document 1. Engagement Letter — Calderwood & Harkness to TSL.
Parties: Calderwood & Harkness LLP and Thalassa Shipping & Logistics SA. Signed June 13, 2022 by Spyros Andreou (CEO, TSL) and Robert Adeyemi (Responsible Partner, C&H). Covers C&H's representation of TSL as issuer's counsel in connection with the proposed offering. Includes fee estimates, billing arrangements, conflict waivers, and scope of engagement. Status: Fully Executed.
Document 2. Conflict Check Memorandum.
Internal C&H memorandum dated June 10, 2022. Prepared by Natasha Forbes and approved by Robert Adeyemi. Covers all identified parties to the transaction. No conflicts identified. Status: Completed.
Document 3. Matter Opening Memorandum.
Internal C&H memorandum dated June 13, 2022. Documents the opening of Matter No. 1044-00004 and Client No. 80214-TSL in the C&H time and billing system. Status: Completed.
Document 4. This Dormancy Memorandum.
Dated December 1, 2022; updated September 8, 2023. Status: Current document.
B. Core Transaction Agreements
Document 5. Indenture (Near-Final, 5th Draft).
Singapore-law governed indenture among Thalassa Shipping & Logistics SA and Thalassa Finance Pte. Ltd. (as Co-Issuers), each Guarantor Subsidiary (as Guarantors), Marlowe Asset Management Trust Company of Singapore Pte. Ltd. (as Trustee), and Atlas Collateral Agency Pte. Ltd. (as Security Agent). First draft circulated June 27, 2022; 5th draft agreed September 6, 2022 following extensive negotiations with W&C. Includes all operative covenants, events of default, redemption provisions, collateral mechanics, and exhibits (including forms of Global Notes and Supplemental Indenture). No material open points remain. Status: Near-Final.
Document 6. Purchase Agreement (Near-Final Draft).
Among the Co-Issuers, Guarantors, and the Initial Purchasers (ABS and HPI). Rule 144A / Regulation S structure. Includes representations and warranties of the Co-Issuers and Guarantors, conditions to closing, indemnification and contribution provisions, and the Initial Purchaser discount mechanics. The total Initial Purchaser discount was 2.00% of the aggregate principal amount ($8,000,000), allocated 65% to ABS ($5,200,000) and 35% to HPI ($2,800,000). Settlement mechanics provided for DTC delivery against payment. Status: Near-Final.
Document 7. Registration Rights Agreement (Near-Final Draft).
Among the Co-Issuers, Guarantors, and the Initial Purchasers. Provides for an exchange offer to be consummated within 365 days of the Issue Date, pursuant to which the Co-Issuers would offer to exchange the privately placed Notes for new notes registered under the Securities Act with substantially identical terms. In the event the exchange offer cannot be consummated, the Co-Issuers would be required to file a shelf registration statement. Liquidated damages provisions for failure to timely complete the exchange offer or shelf registration. Status: Near-Final.
Document 8. Intercreditor Agreement (Near-Final, 3rd Draft).
Among the Co-Issuers, Guarantors, ACA (as Security Agent), and VTC (as Trustee). First draft circulated August 22, 2022; 3rd draft reached near-final status. Governs the priority and enforcement mechanics among the secured parties, including standstill periods, enforcement waterfalls, and the relationship between the Trustee and the Security Agent. Minor outstanding comments from Thornton Ashworth LLP (Trustee's counsel) regarding the Trustee's consultation rights during enforcement were outstanding at the time of shelving and would need to be resolved upon reactivation. Status: Near-Final (minor comments outstanding).
Document 9. Form of Global Note — Rule 144A.
Exhibit to the Indenture. Proposed CUSIP 87265T AA1 / ISIN US87265TAA10. Form agreed among all parties. Includes legend requirements for resale restrictions applicable to QIBs. Status: Form Agreed.
Document 10. Form of Global Note — Regulation S.
Exhibit to the Indenture. Proposed ISIN XS2498731056 / Common Code 249873105. Form agreed among all parties. Includes legend requirements applicable to non-U.S. persons. Status: Form Agreed.
Document 11. Form of Supplemental Indenture — Guarantor Joinder.
Exhibit to the Indenture. Standard form to be used when additional Restricted Subsidiaries are required to accede to the Indenture as Guarantors pursuant to the covenant requiring future subsidiary guarantees. Status: Form Agreed.
Document 12. Paying Agent and Transfer Agent Agreement (Near-Final Draft).
Between the Co-Issuers and VTC (as Paying Agent, Transfer Agent, and Registrar). Trustee acceptance fee of $25,000 (payable at closing) and annual fee of $15,000 (payable on each anniversary of the Issue Date). Standard provisions regarding replacement of paying agent, record dates, and payment mechanics. Status: Near-Final.
C. Security Documents
Document 13. Deed of Ship Mortgage (Form — Singapore Law).
Form of first-priority ship mortgage to be executed and registered over each of the 28 Collateral Vessels. Singapore-law form adaptable for registration under the relevant flag-state registry. Mortgagee: ACA (as Security Agent). Form agreed among C&H, W&C, and ACA. Flag-state specific adaptations for certain vessel registries (discussed further in Section IX) were not finalized prior to the suspension of the offering and will require engagement of flag-state counsel upon reactivation. Status: Form Agreed.
Document 14. Deed of Assignment of Earnings and Insurances (Form).
Form of first-priority assignment of all charter hire, freight revenue, demurrage, insurance proceeds, and requisition compensation payable in respect of each Collateral Vessel. Assignee: ACA (as Security Agent). Status: Form Agreed.
Document 15. Share Pledge Agreement — Thalassa Finance Pte. Ltd.
Pledge of 100% of the issued shares of TFPL by TSL (as pledgor) in favor of ACA (as Security Agent). Singapore law governed. Includes voting rights pass-through during no-default periods and Security Agent's right to exercise voting rights upon an Event of Default. Status: Near-Final.
Document 16. Share Pledge Agreement — Fleet-Owning Guarantor Subsidiaries (Form).
Form of pledge agreement for 100% of the equity interests in each fleet-owning Guarantor Subsidiary. Adapted for each jurisdiction of organization (Malta, marshall Islands, Dubai, Singapore). Pledgor: TSL (or relevant intermediate holding entity). Pledgee: ACA (as Security Agent). Status: Form Agreed.
Document 17. Assignment of Intercompany Loan Receivables.
First-priority assignment by TFPL of $365,000,000 in aggregate intercompany loan receivables owed by the fleet-owning Guarantor Subsidiaries to TFPL, in favor of ACA (as Security Agent). The assignment provides that upon an Event of Default, the Security Agent may direct the fleet-owning subsidiaries to make payments on the intercompany loans directly to the Security Agent for the benefit of the Noteholders. Status: Near-Final.
D. Offering Memorandum & Disclosure
Document 18. Offering Memorandum (Near-Final, 4th Draft).
Approximately 280 pages. Dated September 12, 2022. The OM was structured in the following sections: cover page and summary; risk factors; use of proceeds; capitalization; selected financial data; management's discussion and analysis of financial condition and results of operations; business description (including fleet profile, trade lanes, competitive landscape, and regulatory environment); management; principal shareholders; certain relationships and related-party transactions; description of the Notes (including summary of the Indenture, security package, and covenants); description of other indebtedness; taxation (Greece, Singapore, and United States); plan of distribution (Rule 144A / Regulation S mechanics); transfer restrictions; and legal matters. The business description and risk factor sections were finalized. The financial data sections remained subject to final circle-up with K&W and would need to be updated with the most recent available financial data upon reactivation. Status: Substantially Agreed.
Document 19. Risk Factors Drafting Memorandum.
Internal C&H memorandum categorizing the risk factors for inclusion in the OM. Organized by category: industry and market risks (freight rate volatility, BDI sensitivity, vessel supply/demand); company-specific risks (fleet concentration, customer concentration, key-person risk); financial risks (leverage, interest rate, currency); regulatory and legal risks (Greek maritime law, environmental regulations, sanctions and trade compliance, flag-state regulations); structural risks (holding company structure, upstream guarantees, collateral enforcement in multiple jurisdictions); and offering-related risks (lack of public market for the Notes, transfer restrictions, exchange offer risk). Cross-references to the corresponding OM business sections. Prepared by Natasha Forbes and Brendan Walsh. Status: Completed.
Document 20. 10b-5 Disclosure Letter (Draft Framework to Whitfield & Crane).
Draft framework for the negative assurance letter to be delivered by W&C (as Initial Purchasers' counsel) at closing. The draft outlined the scope of procedures that W&C intended to undertake, including review of the OM, participation in due diligence sessions, review of material contracts, and participation in management calls. Prepared by Brendan Walsh for discussion with Thomas Whitfield III and Rebecca Samuels. The scope of procedures was identified but had not been finalized at the time of shelving. Status: Draft.
Document 21. Investor Presentation (Near-Final, ~45 slides).
Roadshow investor presentation dated September 19, 2022. Approximately 45 slides covering TSL's business overview, fleet profile (by vessel type, age, DWT, and flag state), trade lane analysis, historical financial performance, management team, transaction summary, pro forma capitalization, credit highlights, and investment considerations. Reviewed by C&H for consistency with the OM disclosure. The presentation would need to be substantially updated with current financial data and fleet information upon reactivation. Status: Near-Final.
E. Due Diligence & Legal Opinions
Document 22. Due Diligence Memorandum (Issuer Counsel).
Comprehensive C&H memorandum prepared following the due diligence session and management presentation conducted in Piraeus on July 25, 2022. The memorandum covers the following subject areas: TSL corporate structure (including organizational charts for all subsidiaries); material contracts (time charters, voyage charters, freight-forwarding agreements, port services agreements, vessel management agreements); existing indebtedness (Meridian Maritime Bank AG $190M facility and Clearwater Shipping Finance Ltd. $120M facility, including summaries of key terms and change-of-control provisions); fleet documentation (certificates of registry, classification records, safety management certificates, continuous synopsis records); litigation and disputes (review of pending and threatened claims); regulatory and environmental compliance (MARPOL, ISM Code, ISPS Code, EU ETS, Greek maritime regulatory requirements); employment matters (crew agreements, CBAs, shore-based employment); insurance (hull and machinery, P&I, loss of hire, war risks); and tax structure (Greek tonnage tax, Singapore tax residency of TFPL, withholding tax analysis). Prepared by Brendan Walsh and Natasha Forbes; reviewed by Robert Adeyemi. Status: Completed.
Document 23. Form of Officers' Certificate.
Form of officers' certificate to be executed at closing by Spyros Andreou (CEO) and Marina Demetriou (CFO) certifying the accuracy of representations and warranties in the Purchase Agreement, the absence of any Material Adverse Effect, and compliance with conditions to closing. Status: Form Prepared, Unexecuted.
Document 24. Legal Opinion — Calderwood & Harkness (Draft).
Draft C&H legal opinion covering Singapore-law matters, including due authorization of the offering by the Co-Issuers, valid issuance of the Notes, and enforceability of the Indenture and related Singapore-law governed documents against the Co-Issuers and Guarantors. Includes customary assumptions, qualifications, and limitations. Draft prepared by Brendan Walsh and reviewed by Robert Adeyemi. Status: Draft, Undelivered.
Document 25. Legal Opinion — Delphi & Karidis (Draft, C&H Review).
Draft Greek-law legal opinion from Delphi & Karidis LLP (Nikolaos Karidis, Senior Partner) covering TSL's corporate capacity as a Greek SA, the validity of board approvals for the offering, GEMI registration (No. 148276201000), and the absence of conflicts with Greek law, TSL's articles of incorporation, and applicable regulatory requirements. C&H markup and comments included. Status: Draft, Undelivered.
Document 26. Legal Opinion — Rajendra & Osman (Draft, C&H Review).
Draft Singapore-law legal opinion from Rajendra & Osman LLP (Anil Rajendra, Managing Partner) covering TFPL's corporate capacity (UEN 202209345K), due authorization, enforceability of TFPL's obligations under the Indenture and related documents, and ACRA compliance. C&H markup and comments included. Status: Draft, Undelivered.
Document 27. Comfort Letter Request to Kestrel & White.
Dated August 1, 2022. Addressed to Georgios Papadimitriou (Audit Partner, K&W). Outlined SAS 72/ISAE-equivalent comfort letter procedures and identified specific circle-up items, including revenue ($687.4M), Adjusted EBITDA ($214.6M), total assets, total debt, cash and cash equivalents, capital expenditures, depreciation and amortization, and other key financial line items to be verified against the OM financial disclosure. The comfort letter request was delivered and acknowledged by K&W, but the actual comfort letter was never finalized or delivered due to the postponement of the offering. Status: Sent; Comfort Letter Never Finalized.
F. Corporate Authorizations & Closing Deliverables
Document 28. Draft Board Resolutions — TSL.
Draft resolutions of the board of directors of Thalassa Shipping & Logistics SA authorizing the offering, the execution and delivery of all transaction documents (including the Indenture, Purchase Agreement, Registration Rights Agreement, Intercreditor Agreement, and all security documents), and the appointment of Spyros Andreou (CEO), Marina Demetriou (CFO), and Alexandros Theodorakis (General Counsel) as authorized signatories. Draft prepared by C&H and circulated to Alexandros Theodorakis for review and comment. Status: Draft, Unexecuted.
Document 29. Draft Board Resolutions — TFPL.
Draft written resolution of the sole director (Marina Demetriou) of Thalassa Finance Pte. Ltd. authorizing TFPL's participation as co-issuer, the execution and delivery of the Indenture and related transaction documents, and the grant of security over the $365 million aggregate intercompany loan receivables from TFPL to the fleet-owning Guarantor Subsidiaries. Coordinated with Rajendra & Osman LLP regarding Singapore Companies Act requirements for written resolutions of sole directors. Status: Draft, Unexecuted.
Document 30. Closing Checklist.
Master closing checklist comprising approximately 85 line items organized by the following categories: corporate authorizations (TSL, TFPL, Guarantor Subsidiaries, KMH); transaction agreements (Indenture, Purchase Agreement, Registration Rights Agreement, Intercreditor Agreement, Paying Agent Agreement); security documents (ship mortgages, assignments of earnings and insurances, share pledge agreements, assignment of intercompany receivables); opinions and certificates (C&H opinion, Delphi & Karidis opinion, Rajendra & Osman opinion, W&C 10b-5 letter, officers' certificate, secretary's certificate); comfort letter (K&W); financial deliverables (audited financials, interim financials, pro forma capitalization); regulatory and listing (SGX-ST listing application, DTC eligibility, Thackeray Partners LLC/Ashgrove Enterprises eligibility); and funding and payment mechanics (wire instructions, payoff letters, OID allocation). Originally targeted closing date: October 15, 2022. All items marked incomplete/suspended as of November 14, 2022. Status: Suspended.
Document 31. Closing Memorandum / Assembled Signature Pages.
Signature page package assembled for all transaction documents, including the Indenture, Purchase Agreement, Registration Rights Agreement, Intercreditor Agreement, all security documents, and the Paying Agent and Transfer Agent Agreement. Includes signature blocks for TSL, TFPL, each Guarantor Subsidiary (Thalassa Dry Bulk Operations Ltd., Thalassa Container Feeder Ltd., Thalassa Port Services FZCO, Thalassa Freight Solutions Pte. Ltd.), KMH (for the limited parent guarantee), ABS, HPI, VTC, and ACA. No signatures were obtained prior to the suspension of the offering. Status: Assembled, Unexecuted.
G. Correspondence & Notices
Document 32. Suspension Notice — TSL to Anchor Bay Securities.
Formal letter dated November 14, 2022, from TSL to ABS. Signed by Spyros Andreou (CEO) and addressed to Marcus Reinhardt (Managing Director, Head of Shipping & Transportation DCM, ABS). Drafted by C&H (Brendan Walsh) and reviewed by Robert Adeyemi prior to execution. The letter formally suspends the offering, reserves TSL's right to reactivate at a future date, and confirms that all near-final documentation remains available for purposes of any relaunch. Copies were distributed to all working group members. Status: Sent.
Document 33. Draft Payoff Letter Request — Meridian Maritime Bank AG.
Draft letter from TSL to Hans-Peter Gerber at Meridian Maritime Bank AG requesting payoff amounts, per diem interest calculations, wire instructions for remittance of payoff proceeds, and discharge and security release mechanics for the $190,000,000 bilateral facility. The letter was prepared in draft form but was never sent due to the postponement of the offering. Status: Draft, Never Sent.
Document 34. Draft Payoff Letter Request — Clearwater Shipping Finance Ltd.
Draft letter from TSL to Emma Blackwood at Clearwater Shipping Finance Ltd. requesting payoff amounts, per diem interest calculations, wire instructions for remittance of payoff proceeds, and discharge and security release mechanics for the $120,000,000 bilateral facility. The letter was prepared in draft form but was never sent due to the postponement of the offering. Status: Draft, Never Sent.
VI. Fee and Billing Status
The following summarizes the fee and billing status of the C&H engagement and the broader transaction cost estimates:
Calderwood & Harkness Fees. The engagement letter dated June 13, 2022 established an estimated total fee of $2,400,000, based on a blended hourly rate of approximately $1,050 per hour across the engagement team (Adeyemi, Kwon, Walsh, Forbes) and an estimated total of approximately 2,285 hours of attorney time. An interim invoice was issued on December 1, 2022, upon the coding of the matter as dormant, covering all fees and expenses incurred through that date. The balance of the estimated fee, together with any additional hours required for the reactivation and completion of the transaction, would become payable upon reactivation and closing. As of the September 8, 2023 update, no further fee invoices have been issued since the December 1, 2022 interim invoice, and no additional billable time has been recorded to the matter other than de minimis time associated with the periodic check-ins (March 15, 2023 and September 8, 2023) and the preparation of this updated memorandum.