Eagle Bulk Shipping Inc. Reaches Agreement With Korea Lines Corporation
NEW YORK, March 25, 2011 (GLOBE NEWSWIRE) -- Eagle Bulk Shipping Inc. (Nasdaq:EGLE) ("Eagle Bulk") announced today that it has reached a comprehensive agreement with the Receivers of Korea Line Corporation ("KLC") regarding twelve time-chartered vessels impacted by KLC's decision to file for protective receivership earlier this year. The agreement follows extensive and highly constructive dialogue between the two parties.
Main points of the agreement, which is effective from March 15, 2011, are as follows:
-- Charter rates on ten vessels have been adjusted to $17,000 per vessel per day. Additionally, through December 31, 2015, Eagle Bulk will receive all profits between $17,000 and $21,000 per vessel per day. During this period any additional profits above $21,000 per vessel per day are to be split equally between Eagle Bulk and KLC.
-- After December 31, 2015, all profits above $17,000 per vessel per day are to be split equally until the conclusion of the charters which expire at the earliest on December 31, 2018.
-- For the next twelve months, Eagle Bulk will charter these ten vessels and KLC will be responsible for any shortfall between the vessels' actual daily earnings and $17,000 per vessel per day. Any such shortfallshall be treated as a "claim for common benefit" under the Korean laws of corporate reorganization.
-- Time charter rates on two newbuildings have been adjusted to $17,000 per vessel per day with the same profit-sharing arrangement as above. However, Eagle Bulk will charter these vessels from their delivery later this year until December 31, 2011, during which time KLC shall be responsible for any shortfall between the vessels' actual daily earnings and $17,000 per vessel per day, which shortfall shall be treated as a "claim for common benefit" under the Korean laws of corporate Rehabilitation.
-- The charter on one vessel was not impacted, subject to the continued performance of the vessel's subcharterer. The daily time charter rate on this vessel remains $18,300 until January 2014, after which the rate will be $18,000 per day plus 50% of any profits above this rate until the earliest completion of the charter in December 2018.
-- The Company expects to receive all unpaid time charterhire at originally contracted rates for the period beginning the day after KLC received rehabilitation protection on February 15, 2011 to March 15, 2011.
-- Eagle Bulk expects to file a claim for all unpaid amounts in respect of the employment of the eleven vessels currently under charter to KLC for the period to February 15, 2011, the date on which KLC was granted Rehabilitation protection by the Korean court. The disposition of those claims for unpaid amounts due under those charters for that initial period to February 15, 2011 will be determined by the Korean courts at a future date.
Source: Eagle Bulk Shipping Inc.