Embattled US bulker owner Eagle Bulk Shipping has secured another stay of execution but it’s unclear whether efforts to overhaul $1.2bn worth of debt are bearing fruit.
In a disclosure filed after the close Nasdaq-quoted Eagle said it has been given two more weeks to pursue a restructuring and execute a binding agreement with lenders.
Under the terms of the freshly minted extension the waiver, which has shielded the company from loan covenant violations for the past three months, will not expire until 15 July.
In tonight’s filing Eagle Bulk said the amendment, which marks the sixth time the deadline has been postponed, is meant to facilitate “continued discussions” with its lenders.
The owner also indicated it has no intention of making an interest payment that is due on 30 June, which is also the day the waiver would have expired in the absence of another extension.
“Interest will continue to accrue on the unpaid interest payment during the period of forbearance at the penalty rate specified in the credit agreement,” it added in the late-breaking disclosure.
Eagle Bulk said negotiations with lenders are still underway but admitted the outcome remains uncertain and acknowledged that the risk of shareholder dilution continues to be high as well.
Today’s extension leads some to believe that management is making progress but others continue to think they will be forced to pursue a Chapter 11 restructuring in New York’s Southern District.
In a recent posting found on Yahoo Finance’s Eagle Bulk message board one investor argued that “the day of reckoning” is “just around the corner” even if the owner manages to secure additional waivers in the weeks to come.
Eagle Bulk Shipping, whose shares trade under the symbol "EGLE", is led by chief executive Sophocles Zoullas and based in Manhattan where it oversees a fleet of 45 bulkers that boast an average age of about 6.9 years.
VesselsValue.com, a ship valuation portal created and administered by a leading UK sale-and-purchase broker, believes the supramaxes and handymaxes are worth approximately $951m in total in today’s market.
