Scrubber Amendment

Eagle Bulk to ask bondholders for scrubber amendment

Gary Vogel-led bulker owner is seeking approval to put proceeds from the sale of 'security vessels' toward the cost of four scrubbers.

Eagle Bulk Shipping is asking holders of a $200m bond to direct funds from the sale of certain vessels backing the debt toward four exhaust gas scrubber installations.

The company plans to set bondholder meetings starting 5 October for approval of up to $25m from the sale of an undisclosed number of "security vessels" for putting scrubbers on four such ships.

Gary Vogel-led Eagle Bulk plans to install the four scrubbers as part of a 19-scrubber order announced 4 September that includes options to buy 18 more of the devices. The cost, including installation, is expected to be approximately $2m per scrubber.

The company intends to complete the 19-unit installation before 2020 when the International Maritime Organization will require ship exhaust sulphur content to dip to 0.5% from 3.5%.

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The meetings will be arranged by DNB Markets, Fearnley Securities and SEB for discussion of the bond terms set in late November 2017, Eagle Bulk said.

According to the terms, proceeds from sale of a security vessel can only be used towards vessel acquisitions or tendering for outstanding bonds.

The 8.25% senior secured bonds due in November 2022 were issued by subsidiary Eagle Bulk Shipco and are governed by Nordic Trustee.

ShipCo plans to pay for the installations through other funds as well, including available cash and cash flow from operations.