Bell tolls for Eagle Bulk

US bulker operator Eagle Bulk Shipping (Eagle Bulk) has been given a few more days to overhaul a $1.1bn credit facility but time appears to be running out.

Under the freshly minted waiver extension the Nasdaq-quoted owner and its lenders must agree on the terms of a restructuring by 5 June or run the risk of breaching loan covenants, according to a filing with the US Securities & Exchange Commission.

While this is the fourth time Eagle Bulk has secured a stay of execution in recent months industry observers note the duration of the 31 May extension is the shortest yet, which leads some to believe a comprehensive resolution may be forthcoming.

One of these individuals also noticed the new deadline is due to elapse at 9:00 am this Thursday, which he believes to be somewhat unusual since waivers often expire at the close of the business day, and said he doesn’t expect to see lenders sanction another delay.

If a restructuring materialises it’s unclear what form it will take but many market forecasters who follow Eagle Bulk and its stock continue to believe the company will file for Chapter 11 bankruptcy protection in the Southern District of New York.

In a recent filing with securities regulators the Manhattan-based bulker operator warned that it may be forced into bankruptcy or liquidation if it is unable to find alternative sources of financing but admitted the future was still uncertain.

Today, it offered no assurances that ongoing efforts to restructure the Royal Bank of Scotland credit facility will be successful and reminded investors that a transaction, if sealed, would likely be “substantially dilutive” to existing shareholders.

The list of lenders that signed off on the latest waiver extension includes Bank of America, Brigade Capital, Canyon Capital Advisors, Goldman Sachs, Merrill Lynch Credit Products, Midtown Acquisitions, Panning Capital and Oaktree Capital.

Eagle Bulk Shipping, whose shares trade under the symbol "EGLE", is led by chief executive Sophocles Zoullas and based in Manhattan where it oversees a fleet of 45 bulkers that boast an average age of about 6.9 years., a ship valuation portal created and administered by a leading UK sale-and-purchase broker, believes the supramaxes and handymaxes are worth approximately $965m in total in today’s market.

You can read Eagle Bulk's latest securities filing in full by clicking on the link located under the Related Media section to the right of this article