Eagle Bulk Shipping has signed a forbearance and standstill agreement with its lenders that will hold off any action after the NASDAQ-listed owner missed a scheduled loan repayment on January 15.
The agreement gives Eagle Bulk until February 2 to resolve the matter with its banks. The company says it is in discussions with shareholders and lenders to find alternative financing in the interim.
Eagle Bulk was unable to make the quarterly repayment after being found to be in breach of a loan facility from ABN AMRO Capital USA and a consortium of other lenders.
As a result of the breach, Eagle Bulk said its lenders decided the company could not access or draw down any additional amounts from the revolving credit facility included under the loan agreement.
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 New York-based owner filed for Chapter 11 bankruptcy in August that year.
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 today.
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 (formerly Burma) for third-party charterers. Eagle Bulk said the violation occurred under “a different senior operational management team”.