Eagle Bulk has extended its forbearance and standstill agreement with its creditors by a further week, which will give the NASDAQ-listed company more time to resolve its liquidity problems.
The New York-based shipowner signed the original agreement when it missed a scheduled loan repayment on January 15, which held off action from its creditors until February 2.
On Monday, the parties agreed to extend the forebearance period until February 9, which Eagle Bulk said would provide it with more time to “evaluate potential financing alternatives to enhance its liquidity”.
“The extension of the forbearance period is intended to provide the company with additional time to continue discussions with certain of its shareholders and lenders with respect to such financing alternatives,” Eagle Bulk said today, adding there could be no guarantee this could be done by February 9 or that the period would not be further extended.
Eagle Bulk was unable to make the quarterly repayment on January 15 after being found to be in breach of a loan facility from ABN AMRO Capital USA and a consortium of other lenders.
The company closed on a $275m exit financing facility 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.
As a result of the breach, Eagle Bulk’s lenders have blocked the company from accessing or drawing down any additional funds from the revolving credit facility included under the loan agreement.
The loan agreement was breached by “apparent violations in the provision of shipping services for third-party charterers with respect to the transportation of cargo”, Eagle Bulk said last month.
In a filing to the US SEC in November, the company disclosed “certain apparent violations of US sanctions regulations” while transporting cargo to or from Myanmar for third-party charterers. Eagle Bulk said the violation occurred under “a different senior operational management team”.
