Eagle Bulk has made the quarterly loan repayment it missed in January and has extended its forbearance and standstill agreement with its creditors by a further two weeks while it tries to resolve its liquidity problems.
The NASDAQ-listed company repaid $3,906,250 to its lenders as a condition of amending the forebearance agreement for a second time.
The installment was originally due on January 15, but Eagle Bulk was unable to make the repayment after being found to be in breach of its loan facility with ABN AMRO Capital USA and a consortium of other lenders.
Eagle Bulk’s lenders, which are being led by ABN AMRO Capital USA, today agreed to waive the minimum liquidity covenant set forth in the loan agreement until February 23 or until the shipping company’s liquidity falls below $14,187,500 or $322,443 per ship owned by each of the guarantors, subject to certain conditions.
The company closed on a $275m exit financing facility from the 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.
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”.