TBS International Reaches Agreement With Banks on Payment Deferral
October 01 2010 - 7:00AM
Marketwired
TBS International plc (NASDAQ: TBSI) announced today that, with the
agreement of the requisite lenders under its various financing
facilities, it is not making the principal payments due on its
financing facilities for the period from September 30, 2010 through
November 14, 2010 and that its lender groups will forbear during
this 45-day period from exercising their rights and remedies which
arise from the Company's failure to make principal payments when
due. During this 45-day period, the Company and its various lender
groups will attempt to negotiate amendments to the various
financing facilities that will change the current payment schedules
and cure any existing defaults, and TBS believes that appropriate
amendments to its various financing facilities will be executed
prior to the expiration of the deferral. The Company will continue
to pay interest on its financing facilities at the default interest
rate during this period.
Joseph E. Royce, Chairman, Chief Executive Officer and
President, commented: "The continued weakness in the Baltic Dry
Index, or BDI, the industry indicator for spot dry bulk freight
rates, during the third quarter has caused the Company and our
lenders to consider the desirability of stretching out the
scheduled amortization of principal under our various financing
facilities. This 45-day forbearance agreement provides us all with
the time we need to revise the existing amortization schedules in
our various agreements."
Ferdinand V. Lepere, Executive Vice President and Chief
Financial Officer, commented: "TBS remains in a solid financial
condition, but has concluded that it is prudent to conserve cash by
extending the amortization periods for our various financing
facilities. During this 45-day period, we will continue to operate
our business as usual, to pay all of our vendors and to pay
interest on our debt. We are confident that with the amendments we
are discussing with our lenders we will continue to pay all of our
lenders, vendors and other creditors in full."
Conference call: The Company's management will host a conference
call to discuss these developments at 11:00 a.m. EDT on Friday,
October 1, 2010.
Conference call details: Participants should dial into the call
10 minutes before the scheduled time using the following numbers:
1-866-202-3048 (from the US) or 1-617-213-8843 (International Dial
In). Participant Passcode: 12690726.
Replay: A telephonic replay of the conference call will be
available from 2:00 p.m. EDT on Friday, October 1, 2010 until
Friday, October 8, 2010 by dialing 1-888-286-8010 (from the US) or
1-617-801-6888 (International Dial In). Access Code: 95474127. A
replay of the webcast will be available soon after the completion
of the call.
Forward-Looking Statements "Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
based on management's current expectations and observations.
Included among the factors that, in the company's view, could
cause actual results to differ materially from the forward-looking
statements contained in this press release are the following:
- changes in demand for the company's services, which are
increasingly difficult to predict due to economic conditions and
uncertainty;
- the effect of a decline in vessel valuations;
- the company's ability to maintain financial ratios and satisfy
financial covenants required by its credit facilities, as
amended;
- the company's ability to finance its operations and raise
additional capital on commercially reasonable terms or at all;
- changes in rules and regulations applicable to the shipping
industry, including legislation adopted by international
organizations such as the International Maritime Organization and
the European Union or by individual countries;
- actions taken by regulatory authorities;
- changes in trading patterns, which may significantly affect
overall vessel tonnage requirements;
- changes in the typical seasonal variations in charter
rates;
- volatility in costs, including changes in production of or
demand for oil and petroleum products, crew wages, insurance,
provisions, repairs and maintenance, generally or in particular
regions;
- default by financial counterparties;
- a material decline or weakness in shipping rates, which may
occur if the economic recovery is not sustainable;
- changes in general domestic and international political
conditions;
- changes in the condition of the company's vessels or applicable
maintenance or regulatory standards which may affect, among other
things, the company's anticipated drydocking or maintenance and
repair costs;
- increases in the cost of the company's drydocking program or
delays in its anticipated drydocking schedule;
- China Communications Construction Company Ltd./Nantong Yahua
Shipbuilding Group Co., Ltd.'s ability to complete and deliver the
remaining multipurpose tweendeckers on the anticipated schedule and
the ability of the parties to satisfy the conditions in the
shipbuilding agreements;
- the possible effects of pending and future legislation in the
United States that may limit or eliminate potential U.S. tax
benefits resulting from the company's jurisdiction of
incorporation;
- Irish corporate governance and regulatory requirements which
could prove different or more challenging than currently expected;
and
- other factors that are described in the "Risk Factors" sections
of the company's reports filed with the Securities and Exchange
Commission.
About TBS International plc: TBS is a
fully-integrated transportation service company that provides
worldwide shipping solutions to a diverse client base of industrial
shippers. Through the TBS Five Star Service consisting of ocean
transportation, operations, logistics, port services, and strategic
planning, TBS offers total project coordination and door-to-door
supply chain management. The TBS shipping network operates liner,
parcel and dry bulk services, supported by a fleet of multipurpose
tweendeckers and handysize and handymax bulk carriers, including
specialized heavy-lift vessels and newbuild tonnage. TBS has
developed its business around key trade routes between Latin
America and China, Japan and South Korea, as well as select ports
in North America, Africa, the Caribbean and the Middle East. Visit
our website at www.tbsship.com.
For more information, please contact: Company Contact: Ferdinand
V. Lepere Senior Executive Vice President and Chief Financial
Officer TBS International Limited Tel. 914-961-1000
InvestorRequest@tbsship.com
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