Eagle Bulk Shipping reported it has entered into a restructuring support agreement (RSA) with lenders holding more than 85% of the loans outstanding under its fourth amended credit agreement, dated June 20, 2012, regarding the terms of a balance sheet restructuring that will strengthen Eagle Bulk’s financial position, reduce its debt obligations by approximately $975 million, and significantly enhance liquidity.
According to an 8-K filing dated Augutst 6, 2014, the company said the lender group holding more than 85% is led by Royal Bank of Scotland.
Eagle Bulk Shipping said that to implement the restructuring, Eagle Bulk, the parent company, has commenced a voluntary prepackaged chapter 11 case in the U.S. Bankruptcy Court for the Southern District of New York. The prepackaged case, which excludes all of the company’s operating and management subsidiaries, is intended to facilitate a prompt exit from the financial restructuring process without disruption to Eagle Bulk’s business.
In conjunction with the prepackaged case, Eagle Bulk said it also filed its proposed plan of reorganization and related disclosure statement. The company has already received affirmative votes for the plan from lenders holding more than 85% of the loans outstanding under its credit agreement, constituting more than two- thirds of the total lenders thereunder, amounts sufficient under applicable law for the court to confirm the plan.
Eagle Bulk has also obtained a commitment for up to $50 million of debtor-in-possession (DIP) financing from certain of its lenders which, subject to court approval, will significantly enhance liquidity.