Eagle Bulk Shipping Inc. (EGLE), the world’s second-largest owner of supramax dry-bulk ships, is discussing restructuring options with Jefferies Group Inc. (JEF), said three people briefed on the talks.
Eagle Bulk is examining whether to raise new financing or overhaul borrowings, said the people, who asked not to be identified as talks are private. The company has $1.13 billion of long-term debt under its $1.2 billion revolving credit line that matures July 2014, according to data compiled by Bloomberg.
The fleet operator’s market value has shrunk by more than $2 billion from a May 2008 high as shippers struggle with slumping freight rates. Single-voyage rents for dry-bulk ships have plummeted in 2011 to the lowest in at least five years as the supply of vessels exceeds demand.
Eagle Bulk shares fell 0.9 percent to $1.17 at 4 p.m. New York time, giving the company a market capitalization of about $73 million. The company first sold shares in an initial public offering in June 2005.
Oaktree Capital Management LP, the lender that agreed last month to make a $175 million investment in bankrupt General Maritime Corp. (GMR), is the largest shareholder of Eagle Bulk, Bloomberg data show.
Analysts on average predict Eagle Bulk will post its first annual loss this year, following back-to-back years of declining profit, according to estimates compiled by Bloomberg. The company amended terms in September on an agreement scheduled to expire in April, gaining more time to meet the liquidity requirements laid out in its credit pact.