Eagle Bulk Shipping, Inc. (Nasdaq: EGLE) ("Eagle Bulk" or the "Company") today announced that it has reached an agreement with the Company's lenders and holders of approximately
75% of the Company's outstanding equity for a comprehensive balance-sheet recapitalization. The transaction provides Eagle Bulk with approximately $105 million in incremental liquidity, which includes a new second lien facility comprised of $60 million in new capital from existing shareholders, as well as new capital providers.
Chief Executive Officer Gary Vogel stated, "We are very pleased to have reached this comprehensive agreement that strengthens Eagle Bulk's capital structure. The combination of additional liquidity and the enhanced financial flexibility it provides greatly improves our ability to persevere through the current market, and a new corporate structure will enable us to pursue market opportunities. It is, in short, a new foundation for long-term, sustainable success backed by strong support from our lenders and shareholders.
"With the completion of this transaction, we are now well-positioned to re-focus on Eagle Bulk's development as a world-class commercial and technical Owner/Operator with the objective to deliver premium value and results around our assets. We are grateful to our investors and our lenders, as well as to our employees and business partners, for their confidence in Eagle Bulk's long-term potential."
Additional transaction highlights include the following:
In addition to the $60 million of proceeds from the new second lien facility, Eagle Bulk will benefit from additional incremental liquidity through a $14 million permanent reduction in the Company's first lien minimum liquidity requirement, a deferral of more than $31 million in amortization payments through 2018, and renewed, full access to the Company's $50 million revolver.
Interest on the new second-lien debt is paid-in-kind and is payable in cash only upon loan maturity. In addition to receipt of this paid-in-kind interest, new second lien noteholders will be issued shares of common stock equivalent to 90% of the outstanding common stock of the Company after the issuance.
The transaction also includes changes to Eagle Bulk's organizational structure that will allow the Company to opportunistically pursue growth opportunities in the dry bulk market.
Eagle Bulk intends to file its annual report on Form 10-K for the year ended December 31, 2015, after close of market trading today. The Company further plans to file a proxy statement in May 2016 in connection with shareholder approval needed: (1) for the issuance of shares equal to or more than 20% of the outstanding shares of common stock of the Company at the time of the issuance; (2) to increase the amount of authorized shares; and, (3) to effect a reverse stock split.
This press release does not constitute an offer to purchase any securities or a solicitation of an offer to sell any securities.
Eagle Bulk engaged Akin Gump Strauss Hauer & Feld LLP for legal advice and retained Houlihan Lokey Capital, Inc. as its financial advisor in connection with the transaction.