Western Bulk renegotiates financial arrangements, but remains at risk

Western Bulk renegotiates financial arrangements, but remains at risk

Western Bulk has reached an agreement with its banks and certain vessel owners for an amendment to financial covenants for some loan agreements and related bareboat charter and time charter contracts. The company has also obtained pre-acceptance from the majority of its bondholders to ease financial covenants.

Citing the weak market outlook, Oslo-listed Western Bulk had earlier in the day admitted it risked breaching its financial covenants by the end of 2015. Consequently, a recapitalisation plan has been launched whereby it is looking to raise $15m in additional equity through a partially guaranteed rights offering.

Western Bulk also admitted it might find it a challenge to get its bank to agree a new overdraft facility. “[T]he outcome of this process is uncertain,” the Norwegian firm revealed.

Western Bulk released its results as the Baltic Dry Index stood at record lows and fears of a bulker bloodbath grow.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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