With rates at historic lows and asset pricing depressed, public dry bulk companies such as Paragon Shipping are entering another round of negotiations with their lenders on loan covenants.
On 8 June NASDAQ-listed Paragon confirmed it had agreed with some of its lenders to defer quarterly instalments due in 1Q15 to 2Q16 and waive financial and security cover ratio covenants from 1 January 2015 to 31 March 2016.
“The company is currently in negotiations with the rest of its lenders to obtain similar waivers or amendments,” Paragon said.
In addition, Paragon has postponed until the first quarter of 2016 deliveries of three Kamsarmax newbuildings under that are construction at Jiangsu Yangzijiang Shipbuilding Co. Two of those newbuildings had originally been scheduled for delivery in the second quarter of 2015 and the third in the fourth quarter of 2015.
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Paragon posted a net loss of USD8.9 million for the first quarter of 2015 versus a loss of USD25.9 million the year before. The adjusted net loss was USD8.8 million in the most recent period versus an adjusted loss of USD6 million the previous year.
Average time charter equivalent rates were USD4,801/day in the first quarter of 2015, down 44% from USD8,557/day during the same period in 2014.
“The demand and supply dynamics remain quite averse, and given the current market environment, it has become even more critical to maintain our liquidity,” Paragon CEO Michael Bodouroglou said. “We believe we are taking steps in the right direction, given this difficult market.”