The deal will see an immediate equity infusion from the family of chairman, Gabriel (Villy) Panayotides, as well as restricted cash freed up to allow chartering arrangements and payments to suppliers to continue uninterrupted.
The word on the street is that a steering committee of senior lenders is close to agreeing a debt restructuring running through to 2018.
Under the arrangement Panayotides consolidates control of Excel Maritime as the majority shareholder through a cash injection, with senior lenders participating in a debt for equity swap.
Excel is set to get a liquidity boost of about $80m with the majority of the new funding coming from the Panayotides family.
A key feature of the pre-packaged restructuring is that operation of the Excel fleet of 38 vessels of 3.6m dwt will not be affected, with management of the ships continuing from Greece by Maryville Maritime.
The deal secures Excel Maritime’s debt position through to 2018, by which time the shipping market will be either in better shape or very few operators left afloat.
Market sources suggest there will also be changes beneficial to Excel Maritime in terms of amortisation and release of covenant provisions.
New York stock exchange listed Excel has been struggling in the current difficult freight market with a restructuring of its $1bn of debt expected for some time.
The company failed to file its annual report for 2012 and is on notice that it is not in compliance with stock exchange rules.
Excel shares are currently trading at $0.47 up 1.54% today on market anticipation of a deal, but down from a one year high of $1.30 in late March, and more than $40 a share in 2008.
Market sources see the pre-packaged restructuring as a move that should calm the waters Excel has been battling.
Excel Maritime owns and operates a fleet of six capesizes, 14 kamsarmaxes, 14 panamaxes, two supramaxes and two handymaxes. One of the capesizes is contributed by a joint venture that is more than 71% owned by Excel.
The company listed on the NYSE in 2005 after seven years on AMEX.
