Boston, MA 08/07/2014 (wallstreetpr) – Transportation of a range of minor and major bulk cargoes, Eagle Bulk Shipping (NASDAQ:EGLE), had filed for Bankruptcy protection under Chapter 11 after failing to pay interest for June thus indicating a drop in rates of shipping witnessed by the transport companies.
Restructure Agreement
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) had also struck a deal with its lenders on restructuring its 85% of the outstanding loans under the Fourth amended deal of June 2012 reducing its debt obligations by about $975 million besides helping it enhance liquidity position. It constituted over two-thirds of the total lending, which were considered sufficient to confirm the plan.
Eagle Bulk Shipping had provided a list of assets for $950 million apart from a debt of $1.2 billion in U.S. Bankruptcy Court for the New York’s Southern District. Eagle Bulk Shipping Inc. (NASDAQ:EGLE) also got a commitment for a maximum financing of $50 million of debtor-in-possession from some of its lenders with the court approval, and this would improve its liquidity position.
As per the restructure plan, the lenders would be provided with a 99.5% of fresh equity in exchange of their debt, subject to dilution, apart from the cash distribution of exit financing facility. It meant that the current equity interests in the company would get cancelled with such equity stake getting a bare 0.5% of the fresh equity in the restructured Eagle Bulk Shipping Inc. (NASDAQ:EGLE). This apart, the company indicated seven-year warrants to buy 7.5% more in the new equity in the restructured company.
Management Speaks
Eagle Bulk Shipping’s chairman and CEO Sophocles Zoullas said that Eagle Bulk Shipping Inc. (NASDAQ:EGLE) expects to continue its business in the normal course during the process of the restructuring since its reputation was built on higher industry relationships besides operational excellence.
During the reorganization process, Eagle Bulk Shipping Inc. (NASDAQ:EGLE) would honor all customer arrangements and payment of salaries, wages, and other compensation to its employees, independent contracts and crew without any interruption.
