Eagle Bulk Shipping Files For Bankruptcy

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August 6, 2014

Photo courtesy Eagle Bulk Shipping

By Dawn McCarty

Aug. 6 (Bloomberg) — Eagle Bulk Shipping Inc., an operator of dry-bulk cargo ships, filed for bankruptcy protection after missing a June interest payment, as transport companies continue to face a drop in rates since the financial crisis of 2008.

The New York-based company today listed assets of as much as $950 million and debt of $1.2 billion in a Chapter 11 filing in U.S. Bankruptcy Court in Manhattan. The company transports iron ore, coal, grain, cement and other products worldwide.

Eagle Bulk had assets of $1.7 billion as of Dec. 31. Its debt consisted of $1.1 billion in term loans and $60 million paid-in-kind loans under a credit agreement, it said.

Before the filing, lenders agreed to waive default for the New York-based freight transporter until Aug. 5, according to a July filing with the U.S. Securities and Exchange Commission.

The company reported a net loss for the year ended Dec. 31 of about $70.5 million compared to a loss of $102.8 million in the prior year, according to the filing. Net revenue increased to about $202.4 million for 2013 compared to $190.8 million for the previous year.

A decline in shipping rates since the 2008 financial crisis has helped to drive other ocean-transport companies into bankruptcy, including Overseas Shipholding Group Inc., Korea Line Corp., Britannia Bulk Plc, Armada (Singapore) Pte Ltd. and Transfield ER Cape.

Analysts’ Report

“Dry bulker rates may improve this quarter from current levels on strong grain harvests, as well as robust Chinese demand for commodities such as iron ore,” Lee Klaskow and Talon Custer, Bloomberg Intelligence analysts, said on July 17.

Panamax rates have fallen 69 percent. Supramaxes are down 57 percent, and handysize rates have dropped 54 percent, according to the analysts. Eagle’s fleet of dry cargo vessels consists mostly of supramax vessels, according to its Website.

Peter Georgiopoulos’s Genco Shipping & Trading Ltd. filed for bankruptcy in April citing weak charter rates. Genco listed assets of $2.4 billion and debt of $1.5 billion in its Chapter 11 filing.

Georgiopoulos’s General Maritime Corp. went through a restructuring in 2012 that gave Oaktree Capital Management LP most of the shipping company’s new stock.

General Maritime, which operates in more than 230 ports in more than 70 countries, listed assets of $1.71 billion and debt of $1.41 billion in its Chapter 11 petition.

The case is In re Eagle Bulk Shipping Inc., 14-bk-12303, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Copyright 2014 Bloomberg.

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