General Maritime files for Chapter 11 bankruptcy

(Reuters) - Oil tanker company General Maritime Corp GMR.N filed for Chapter 11 bankruptcy protection on Thursday at a time when the shipping industry is grappling with oversupply and depleting earnings.

Bankers expect more bankruptcies and restructuring in the sector as companies struggle with a worsening world economic crisis and lower earnings driven by a build-up of ships ordered when times were good.

Oaktree Capital Management will make a $175 million equity investment in General Maritime and convert the company’s debt to equity.

In a court filing, the company listed total assets of $1.72 billion and liabilities of $1.41 billion, as of September 30.

General Maritime has also received a commitment for up to $100 million in new debtor-in-possession (DIP) financing from a group of lenders led by Nordea Bank Finland.

The New York-based company said the initial amount of the DIP financing is $75 million.

The company, whose shares have shed about 95 percent of their value this year, has been posting losses for at least the last eight quarters.

General Maritime said all its units, except those in Portugal, Russia, Singapore and certain inactive ones, have also started Chapter 11 cases.

The case is in Re: General Maritime Corp-Southern District of New York, No. 11-15285.

Reporting by Vaishnavi Bala in Bangalore; Editing by Don Sebastian and Sriraj Kalluvila