The Nasdaq-listed containership owner shed light on the development in its fourth-quarter earnings report.
While the revelation didn’t come as a surprise to most observers some Wall Street sources said the resignation marked a “significant loss” for the board and company as a whole given Pribor’s knowledge of shipping and finance.
The commentary came as GSL turned in a fourth-quarter profit of $8.2m, versus a gain in the $10.9m comparable period 12 months prior, as revenue slipped to $39.7m from $36.2m year-on-year.
In the earnings release the company also confirmed reports that it has struck a deal with lenders to waive a loan-to-value covenant that expired on 30 November. Today, it said a test on the ratio would not be performed until 1 December 2014.
Under the terms of GSL’s credit facilities, the ratio of outstanding drawings under the facility and the aggregate charter free market value of the secured vessels cannot exceed 75%, a figure that had haunted investors for some time due to the ongoing decline in asset values.
“The company anticipated that the leverage ratio as at November 30, 2012 would, if tested, exceed 75%,” it told investors Monday. “Therefore, it has agreed with its lenders a further waiver for two years of the requirement to perform the leverage ratio test.”
During the waiver period,GSL says the fixed interest margin to be paid over Libor is 3.75%, prepayments will be based on cash flow but subject to a minimum of $40m on a rolling 12 month basis, rather than a fixed amount, and dividends on common shares cannot be paid.
In the three months ended 31 December 2012, $11.1m worth of debt was prepaid, which left the company with an outstanding balance of $425.7m. It said approximately $57.9m was prepaid over the course of the year.
Going forward, chief executive Ian Webber says his company, which is based in the UK where it oversees a fleet of 17 containerships, intends to continue to use its cash flow to further de-lever its balance sheet
"With an average remaining lease term of over seven years for our fleet and contracted revenue totaling $1bn, we remain well insulated from the current charter rate environment,” he told investors in a statement.
“Further, with supportive credit markets and having secured relief from our loan-to-value test until December 2014, our top priority is to strengthen our capital structure and enhance our financial flexibility to create incremental value for our shareholders.”
Shares of GSL soared 12.71% to $4.08 in the hours following the release of the earnings report. A source with a position in the company says the rally and spike in trading volume follows talk that the owner intends to restore its dividend and hopes to grow in the year ahead.
In a conference call, Webber told investors: "Our aim is to put the company in a position to work with our bank group toreinstate the dividend. We understand clearly the importance of dividends todrive equity value, and we have asset values at the bottom of the cycle, wealso want to be in a position to take advantage of what we see today as anattractive growth environment and thus drive incremental shareholder value."