UPDATE 1-Horizon Lines' reduced fine eases bankruptcy threat

Thu Apr 28, 2011 5:07pm EDT

(Adds company comment, detail)

April 28 (Reuters) - Horizon Lines said a federal court has reduced a criminal fine imposed on it for fixing shipping prices, easing concerns of a possible bankruptcy, sending the container shipping company's shares up 9 percent in extended trading.

"The fine reduction...will facilitate our efforts to secure new long-term financing. We remain in constructive discussions as we continue to move forward with our refinancing efforts," Chief Financial Officer Michael Avara said in a statement.

The United States had filed a motion earlier this week in a district court to reduce the criminal fine to $15 million from $45 million.

The reduced fine of $15 million is payable over five years without interest, the company said.

In February, the company had pleaded guilty to one felony count of fixing the price for shipping heavy equipment, medicine and other goods to Puerto Rico.

The motion filed had said the company will likely be forced to seek bankruptcy protection if the fine was not reduced.

The company had said in March that it could be forced to seek bankruptcy protection for not being able to comply with its debt agreements. [ID:nL3E7ET2M6]

Horizon Lines shares closed up 12 percent at $2.14 on Thursday on the New York Stock Exchange. (Reporting by Vaishnavi Bala in Bangalore; Editing by Don Sebastian) ((vaishnavi.bala@thomsonreuters.com within U.S. +1 646 223 8780 outside U.S. +91 80 4135 5800 Reuters Messaging:vaishnavi.bala.reuters.com@reuters.net)

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