U.S.-flag containership operator Horizon Lines, Inc. (NYSE: HRZ) today announced that a federal court has granted a request by the U.S. Department of Justice to reduce the company's fine related to federal antitrust violations in the Puerto Rico tradelane from $45 million to $15 million.
As a result of the reduced fine, Horizon Lines says that it is no longer facing the prospect of a May 21, 2011, default under its convertible note indenture. The company could have been declared in default by the convertible note holders on any judgment over $15 million that the company was unable to pay, bond, or otherwise discharge in full within 60 days of the March 22, 2011 judgment.
The reduced fine of $15 million is payable over five years without interest, with $1 million payable within 30 days of March 24, 2011 (which has been paid), $1 million on or before the first anniversary, $2 million on the second anniversary, $3 million on the third anniversary, and $4 million annually on the fourth and fifth anniversaries.
Horizon Lines also announced that the plaintiffs in the direct purchaser antitrust class action in Puerto Rico will not object to the company paying the remainder of the $10 million due under the settlement agreement in two equal installments, with the first due within 30 days after final approval by the court and the second due within 60 days after final approval by the court. As a result, the company does not intend to exercise its right to terminate the agreement.
Source: MarineLog
As a result of the reduced fine, Horizon Lines says that it is no longer facing the prospect of a May 21, 2011, default under its convertible note indenture. The company could have been declared in default by the convertible note holders on any judgment over $15 million that the company was unable to pay, bond, or otherwise discharge in full within 60 days of the March 22, 2011 judgment.
The reduced fine of $15 million is payable over five years without interest, with $1 million payable within 30 days of March 24, 2011 (which has been paid), $1 million on or before the first anniversary, $2 million on the second anniversary, $3 million on the third anniversary, and $4 million annually on the fourth and fifth anniversaries.
Horizon Lines also announced that the plaintiffs in the direct purchaser antitrust class action in Puerto Rico will not object to the company paying the remainder of the $10 million due under the settlement agreement in two equal installments, with the first due within 30 days after final approval by the court and the second due within 60 days after final approval by the court. As a result, the company does not intend to exercise its right to terminate the agreement.
Source: MarineLog