Nasdaq-listed supramax specialist Eagle Bulk has extended its forbearance and standstill agreement with its creditors by a further three days to give it more time to find a solution to the money it owes in loans.
The forebearance period commenced on Sunday and will expire at 23:59hrs on Tuesday night. This is the fifth time Eagle Bulk has extended the period with its creditors.
Eagle Bulk’s lenders, which are being led by ABN AMRO Capital USA, have agreed to waive the minimum liquidity covenant set forth in the loan agreement until March 8 or until “the occurrence of any event of default under the loan agreement other than a specified default”.
Under the terms of the previous extension agreement, filed on March 1, the forebearance period would terminate if the shipping company’s liquidity fell below $12,187,500 or $276,989 per ship. Eagle Bulk was required to maintain higher levels of liquidity in the previous forebearance period extensions made earlier this year.
The New York-based company today said the new extension “is intended to provide the company with additional time while discussions with certain of its shareholders and lenders with respect to such financing alternatives are continuing”. It added that financing could not be guaranteed and that the standstill period may yet be extended again.
The creditor agreement relates to a $275m exit financing facility Eagle Bulk secured from its lenders in October 2014, which comprised a $225m term loan and a $50m revolving credit facility. The financial restructuring aimed to boost Eagle Bulk’s balance sheet and liquidity after the shipowner filed for Chapter 11 bankruptcy in August that year.