HOUSTON, Apr. 16 -- Friede Goldman Halter Inc., Gulfport, Miss., Monday said it would miss an $85.7 million payment, plus interests and other costs, due immediately on convertible notes.
In a news release, Friede Goldman said it would not make the interest payment due Mar. 15 on a $185 million principal amount of 4.5% convertible notes. A 30-day grace period under the indenture related to the payment expired Monday.
Friede Goldman Halter also said it received notice from Foothill Capital Corp. last Friday demanding the $85.7 million payment, plus interest and other costs, within 5 days.
On Apr. 3, the manufacturer of maritime and offshore energy equipment cancelled a conference call with investors. Friede Goldman cited "ongoing complexity of our current negotiations with investors, lenders, and potential lenders" as the reason.
On Apr. 5, Friede Goldman secured a loan with Pegasus Partners II LP for $100 million in a senior secured note with a 3-year maturity. An annual report filed Apr. 2 said the company must renegotiate loans and raise millions of dollars or possibly seek bankruptcy protection.
Chris Cunningham, Friede Goldman spokesman, told OGJ Online Monday, "At this point, I don't know what the next step is." He said he could not elaborate and referred reporters to documents filed with the US Securities and Exchange Commission.
On Apr. 4, Moody's Investors Service downgraded Friede Goldman's credit rating, adding Friede Goldman's ratings had been placed on negative outlook since June 1999.
"FGH continues to be in serious negotiations to arrange intermediate-term senior debt funding designed to provide sufficient liquidity for funding needed to operate the business in a stabilized manner," Moody's said in its release. "Liquidity is very thin."
Friede Goldman's financial woes stem from cost overruns and delays on deepwater semisubmersible rig newbuild projects, Moody's said.