Marshall Islands-registered owner of Supramax dry bulk vessels Eagle Bulk Shipping has reached an agreement with its lenders and holders of approximately 75% of the company’s outstanding equity for a comprehensive balance-sheet recapitalization.
The deal comes after a number of delays and extensions of the forbearance period on its loan which was due to be paid in January, 2016.
The transaction provides Eagle Bulk with approximately USD 105 million in incremental liquidity, which includes a new second lien facility comprised of USD 60 million in new capital from existing shareholders, as well as new capital providers.
“The combination of additional liquidity and the enhanced financial flexibility it provides greatly improves our ability to persevere through the current market, and a new corporate structure will enable us to pursue market opportunities,” the company’s Chief Executive Officer Gary Vogel said.
Under the terms of the transaction, Eagle Bulk will benefit from additional incremental liquidity through a USD 14 million reduction in its first lien minimum liquidity requirement, a deferral of more than USD 31 million in amortization payments through 2018, and renewed, full access to its USD 50 million revolver.
The transaction also includes changes to Eagle Bulk’s organizational structure, which the company claims will allow it to “pursue growth opportunities in the dry bulk market.”
Eagle Bulk further plans to issue shares equal to or more than 20% of its outstanding shares, increase the amount of authorized shares, and effect a reverse stock split.
Earlier this month, the company said that it expects to report a full-year operating loss of approximately USD 84 million, further deepening the loss of USD 51.6 million it posted for the corresponding period in 2014.
With regard to revenue expectations, the company anticipates to report USD 102 million in revenue for the year ended December 31, 2015, down from USD 154.3 million from the previous year.
The decrease in revenues and increase in operating losses were primarily attributed to lower charter rates earned by its fleet in 2015.