Joseph E. Royce, Chairman, CEO and President of shipowner TBS International plc (NASDAQ: TBSI) says continued weakness in the Baltic Dry Index has led to an agreement with lenders under which the company will not make certain principal payments due on its financing facilities for the period from September 30, 2011 through December 15, 2011."
TBS operates a fleet of 30 multipurpose tweendeckers and 22 handymax and handysize bulk carriers totaling 1.6 million deadweight tons. It says that its lender groups "will forbear during this period from exercising their rights and remedies which arise from the company's failure to make principal payments when due and any failure to comply with certain of its financial covenants. During this forbearance period, the company and its various lender groups will negotiate amendments to restructure the company's various financing facilities and cure any existing defaults. The company intends to pay only the stated interest on its financing facilities during the forbearance period and will accrue any applicable default interest."
Mr. Royce commented: "The continued weakness in the Baltic Dry Index, or BDI, the industry indicator for spot dry bulk freight rates, during the past 12 months has caused the company and our lenders to consider the desirability of restructuring our various financing facilities. This forbearance agreement provides us with the time we need to restructure our various agreements."
Ferdinand V. Lepere, Senior Executive VP and CFO, commented: "TBS remains in solid financial condition, but has concluded that it is prudent to conserve cash by extending the amortization periods for our various financing facilities. During this negotiation period, we will continue to operate our business as usual, to pay all of our vendors and to pay the stated interest on our debt. We are confident that with the restructuring that we are discussing with our lenders we will continue to pay all of our lenders, vendors and other creditors in full."
September 8, 2011
TBS International reaches agreement with lenders
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