Bell tolls for Excel

Investors are anxiously awaiting an update about the restructuring of Greek bulker owner Excel Maritime Carriers amid growing speculation that a bankruptcy filing may be imminent.

Few expect to see a progress report, however, before 30 April when a temporary loan amortization wavier is due to expire.

Some believe the New York-listed operator may be able to land another extension, others don’t, but what both sides can agree on is that the chances of curing its financial maladies out of court are looking increasingly unlikely.

Market sources tell TradeWinds that bondholders have banded together and are seeking advice from attorneys in a bid to “prepare for all eventualities”.  Some said they have retained Akin Gump Strauss Hauer & Feld as an advisor, a claim the firm has declined to confirm or deny.

Miller Buckfire & Co is serving as Excel’s financial advisor and Skadden, Arps, Slate, Meagher & Flom and Bracewell & Giuliani were hired as legal consultants. The latter handled the bankruptcy of Omega Navigation Enterprises and Marco Polo Seatrade.

If the bulker operator were to seek Chapter 11 protection from creditors legal sources say the filing would likely be made in the Southern District of New York where the company recently set up a temporary office right down the road from one of the region’s bankruptcy courts.

While investors, bondholders and analysts hope to see an update by the 30 April deadline one observer pointed out that Holy Week in Greece begins on Sunday, which means communications from the many Athens-based issuers with New York listings may be few and far between.

According to a corporate fact sheet released in January of this year Excel’s owned fleet included seven capes, 14 kamsarmaxes, 14 panamaxes, two supramaxes and a pair of handies with a total carrying capacity of 3.6 million DWT.

The database estimates the 39 bulkers to be worth approximately $619m today’s market. The cumulative total excludes chartered tonnage like the 76,000-dwt Coal Age, Fearless I, King Coal and Barbara (all built 1997), which are at the centre of a dispute.

Shares of Excel, which trade on the New York Stock Exchange under the ticker “EXM”, fell 4.42% before bottoming out at around $0.43 in the hour leading up to the close on Friday.

Earlier this month Omar Nokta of Global Hunter Securities initiated research coverage of the stock with a “sell” rating in a note that highlighted lingering concerns about what the analyst described as a “high debt balance” and exposure to “weak” freight rates.

The researcher said the company is grappling with “a liquidity issue” as more than $350m worth of debt matures this year and next. The outstanding total includes $116m of convertible bonds with put options that are exercisable in 2014.

“The threat of bondholders exercising their put options to Excel keeps the risk of a bankruptcy filing at the forefront,” Nokta, whose commentary echoes reports issued by many of his peers, told investors.