Eagle Bulk Has Until February to Reach Outstanding Loans Agreement

Condor is one of 44 vessels owned by Eagle Bulk

With pressure already mounting from the dry bulk market collapse, Eagle Bulk Shipping Inc. has now been given until February 2 under a Forbearance and Standstill agreement to determine how it will settle with its lenders, who did not receive a scheduled January 15, 2016 loan repayment from the company.

The missed payment was due to the lender parties deciding that Eagle "could not access any additional amounts from the revolving credit facility under the Loan Agreement, including any drawdown for purposes of making the quarterly repayment instalment due on January 15, 2016," according to a document filed on January 19 with the United States Securities and Exchange Commission.

The lending group, led by agent ABN AMRO, took the action after Eagle Bulk in November 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.

According to the Exchange Commission document, Eagle, which had debt of $232 million as of September 30, 2015, is currently discussing with shareholders and lenders potential financing alternatives.

But the document notes that "there can be no assurance that the Company will reach any agreement with any of its shareholders or Lenders to structure any potential financing by the end of the Forbearance Period, if at all, or that the Forbearance Agreement or Forbearance Period will be extended."

Presumably, Eagle's lending group could call their loan - which is secured by first-priority mortgages on the 44 bulkers owned by the company - if an agreement isn't reached next month.

VesselsValue.com assesses the 43 supramax and one handymax fleet to be worth $325.72, with a demo value of $115.93. 

In November, Gary Vogel, chief executive officer for Eagle, stated that his company was in the early stages of a "fundamental effort to redefine" itself.