High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
Eagle Bulk Shipping Inc. (Nasdaq:EGLE) said today that it has reached an agreement with its lenders that will allow the U.S.-based bulk vessel owner to refinance its mountain of debt and resolve all outstanding issues with its lenders. In a statement, Eagle Bulk said the agreement should significantly improve the company’s position amid the ongoing, cyclical downturn in the shipping markets.
“We are pleased to have reached this comprehensive agreement with our syndicate, with whom we have worked constructively and cooperatively,” commented Sophocles N. Zoullas, Eagle Bulk’s Chairman and Chief Executive Officer. “Eagle Bulk is confident that the agreement materially improves the company’s current business prospects, and enhances our competitiveness as the market stabilizes.”
The agreement was reached with a syndicate of its lenders led by Royal Bank of Scotland plc.
Under the agreement, lenders have agreed to waive any purported defaults or events of defaults and convert the over US$1.1 billion currently outstanding under the existing revolver into a term loan with a maturity set through 2015, with the option to extend into 2017. Eagle Bulk will also receive a new liquidity facility in the amount of $20,000,000 as part of the deal.
A statement by Eagle Bulk adds that the agreement replaces all existing financial covenants and substitutes them with new covenants that will phase-in over the next three years. The agreement will allow for the purchase or sale of vessels and management of third party vessels, provided certain parameters.
Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered in New York. The company is a leading global owner of Supramax dry bulk vessels that range in size from 50,000 to 60,000 deadweight tons and transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes.
Eagle Bulk shares soared over 14% in after hours trading to $3.40.
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