The bulk cargo shipping company announced today that it has reached a restructuring agreement with lenders holding over 85% of the loans under its 2012 credit agreement to reduce its total debt by $975 million and provide payment in full for trade creditors.
In order to execute its restructuring plan, Eagle Bulk began a voluntary Chapter 11 bankruptcy case in the U.S. Bankruptcy Court for the Southern District of New York, in order to "facilitate a prompt exit from the financial restructuring process without disruption to Eagle Bulk's business," the company said.
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Eagle Bulk received a $50 million debtor-in-possession financing from some of its lenders, which if approved by the court will enhance the company's liquidity.
Separately, TheStreet Ratings team rates EAGLE BULK SHIPPING INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate EAGLE BULK SHIPPING INC (EGLE) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."