Eagle Bulk Shipping Inc. (Nasdaq:EGLE) today provided an update to the market concerning Korea Lines Corporation's ("KLC") decision last month to file for protective receivership. As of today, Eagle Bulk is owed approximately $7.3 million of charter hire from KLC, of which approximately $3.00 million was due and owing prior to KLC filing for rehabilitation on January 25, 2011.
Eagle Bulk management remains in active negotiations concerning the status of its charters with KLC, with the following recent developments:
- All of Eagle Bulk's charters to KLC remain intact, though no charter
hire payments are currently being received. Eagle Bulk has been advised
by KLC that it expects to receive Court approval in South Korea in order
to qualify for rehabilitation later this month, at which time KLC
expects to resume charter hire payments.
- To cover the period until the Court allows KLC to resume hire payments,
and subject to court approval, Eagle Bulk is working with KLC on
arrangements to take over the employment of some of the affected charter
vessels for an interim period. All such earnings would be used to offset
the charter hire otherwise due from KLC.
- With regard to the "Nighthawk," a newbuilding vessel which is due to
deliver to KLC later in the first quarter, Eagle Bulk and KLC have
agreed in principle, again subject to Court approval, to defer the
commencement of the charter in order to allow Eagle to employ the vessel
for its own account for the time being.
Eagle Bulk CFO Alan Ginsberg commented, "We have been working diligently to mitigate potential losses associated with KLC's financial restructuring. Securing alternative employment for our vessels while KLC awaits court approval to resume charter payments constitutes an important step in this regard."
Source: Eagle Bulk Shipping
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