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.