After suffering nearly USD $19 million in losses in the 3rd quarter, Paragon Shipping Inc. (NYSE: PRGN) has been working diligently with their lenders to come to agreements on how to move forward, and sustainably during the deep and sustained downturn in the dry bulk shipping market.
Over the past week, Paragon announced they had reached agreements with five of their lenders, Unicredit Bank AG, The Bank of Scotland Plc, Bank of Ireland, HSBC Bank Plc, and their largest lender, Commerzbank AG.
More specifically, Paragon has obtained waivers and agreed to the relaxation of several financial and security coverage ratio covenants, the deferral of a portion of its scheduled quarterly installments and, in the case of the loan agreement with Bank of Ireland and The Bank of Scotland Plc, the extension of the loan agreements to the second quarter of 2017 and to the third quarter of 2015, respectively. In addition, in respect to the loan agreement with The Bank of Scotland Plc, Paragon has agreed to a payment of $2.8 million for the full and final settlement of $4.7 million in debt, representing the portion of the loan of one of the syndicate members. This advance payment of $2.8 million was made on December 10, 2012.
Commenting on the agreement, Michael Bodouroglou, Paragon’s Chairman and Chief Executive Officer stated, “We are happy to announce an agreement with our largest lender, Commerzbank, as we work towards a common goal of ensuring the Company’s continued stability. We believe we will enter into agreements with our remaining two lenders in due course.”