Eagle Bulk Orders Two

Wednesday, November 08, 2006
Eagle Bulk Shipping Inc. > (Nasdaq:EGLE), a global marine transportation company specializing in > the Supramax segment of the dry bulk shipping industry, today announced > that it has signed contracts with IHI Marine United Inc., one of > Japan's pre-eminent shipyards, for the construction of two 'Future-56' > class Supramax vessels. These 56,000 deadweight ton vessels have a > contract price of approximately $33.5 million each and are expected to > be delivered in January and February of 2010, respectively. Upon > delivery of these vessels, Eagle Bulk's fleet will include 18 vessels, > 14 of which will be Supramax-class. > > The Company also announced that it has amended its existing revolving > credit facility from its sole lender, Royal Bank of Scotland plc, to > increase the borrowing capacity from $450 million to $500 million. The > financing of the new vessels will not affect the Company's quarterly > cash dividend payout. > > Sophocles Zoullas, Eagle Bulk's Chairman and Chief Executive Officer, > commented, "We are very excited to have secured these world-class > assets at what we believe to be very favorable values. Moreover, we are > pleased that IHI Marine United negotiated directly with the Company for > the construction of the new vessels, and we look forward to working > closely with IHI Marine United throughout the construction process. We > believe these assets will help solidify Eagle Bulk's leadership > position into the future." > > The contract price for each vessel is 3.655 billion Japanese Yen or > approximately $33.5 million after giving effect to currency hedges. The > Company has placed deposits of 1.462 billion Japanese Yen or $12.4 > million for each of the vessels which were funded through borrowings > from its credit facility, and will pay an additional 10% of the > contract price in November 2009, and the remainder upon delivery which > is expected in January and February 2010, respectively. The Company has > hedged its Japanese Yen exposures into U.S. Dollars in order to > effectively eliminate currency risk. > > The $500 million amended credit facility contains the same terms as the > Company's previous facility with a maturity in 2016. The structure of > our financing will enable us to capitalize pre-delivery payments under > the shipbuilding contracts and costs associated with supervision and > financing the new vessels. As a result, our earnings available for > quarterly cash dividends to our shareholders will not be impacted. > Furthermore, the amended credit facility increases the Company's > undrawn commitment to over $260 million, providing availability to fund > future growth.
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