Eagle Bulk Granted More Time to Rearrange its Troubled Financials

The company had earlier missed a loan repayment of more than US $3 million due January 15, 2016

Eagle Bulk Shipping (Eagle Bulk) Tuesday posted notice that the company's creditors have granted an extension to a previously agreed forbearance period until February 23, 2016, giving the troubled dry bulk shipper extra time to rearrange its finances.

The company had earlier missed a loan repayment of more than US $3 million due January 15, 2016; that payment was made February 9, 2016, serving to "cure the related event of default under the Loan Agreement," according to Securities Exchange Commission (SEC) documents. 

The brief respite gives the company breathing room, but the situation at Eagle Bulk is far from resolved. 

"The extension of the Forbearance Period and the amendment to the minimum liquidity covenant is intended to provide the Company with additional time...however, there can be no assurance that the Company will reach any agreement with any of its shareholders or Lenders...or that the Forbearance Agreement or Forbearance Period will be further extended," the SEC filing read.

The forbearance period is extended to 6:00 a.m. EST, February 23, 2016, but the period could be cut short if certain liquidity measures are breached.

While Eagle Bulk has been at the mercy of a well documented and historic decline in the dry bulk markets, it has also suffered company-specific issues.

In November Eagle Bulk admitted "apparent violations" of US sanctions against Myanmar involving third-party charterers, which took place under the firms previous management headed by founder Sophocles Zoullas.

Last month Ship & Bunker reported that the current decline in dry bulk markets had been called the worst in living memory.