TBS International and Banks Agree to Modify Loan Covenants
April 18 2011 - 9:00AM
Marketwired
TBS International plc (NASDAQ: TBSI) announced today that it and
its various lender groups have agreed to modify certain financial
covenants through December 31, 2011. Pursuant to the new
modifications, the minimum consolidated interest charges coverage
ratio has been reduced for the fiscal quarters ending June 30, 2011
through December 31, 2011 from 3.35 to 1.00 to 2.50 to 1.00. In
addition, the modifications increased the maximum consolidated
leverage ratio for the same periods from 4.00 to 1.00 to 5.10 to
1.00, and reduced the minimum cash requirement from $15 million to
$10 million for the period from July 1, 2011 to December 31, 2011.
The Company expects that these latest amendments will allow the
Company to comply with its various credit facilities through
December 31, 2011. Unless the Baltic Dry Index, and the freight and
charter rates that TBS obtains, strengthen significantly in the
near future, however, it is likely that after December 31, 2011 TBS
would fail to meet the tests under certain of its financial
covenants. The Company's lenders have agreed to enter into further
negotiations at that time, if necessary, to seek further
modifications of those financial covenants.
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:
- the effects of severe and rapid declines in industry conditions
that have required the Company to restructure its outstanding
indebtedness;
- the Company's ability to maintain financial ratios and comply
with the financial covenants in its credit facilities;
- the Company's ability to effectively operate its business and
manage its growth while complying with operating covenants in its
credit facilities;
- the Company's ability to generate the significant amounts of
cash necessary to service its debt obligations;
- very high volatility in the Company's revenues and costs,
including volatility caused by increasing oil prices;
- excess supplies of dry bulk vessels in all classes and
resulting heavy pressure on freight rates;
- adverse weather conditions that may significantly decrease the
volume of many dry bulk cargoes;
- the stability and continued growth of the Asian and Latin
American economies and rising inflation in China;
- the Company's vessels exceeding their economic useful life and
the risks associated with operating older vessels;
- the Company's ability to grow its vessel fleet and effectively
manage its growth;
- impairments of the Company's long lived assets or
goodwill;
- compliance with environmental laws and regulations and the
implementation of new environmental laws and regulations; 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 provides
worldwide shipping solutions to a diverse client base of industrial
shippers through its Five Star Service: ocean transportation,
projects, operations, port services, and strategic planning. The
TBS shipping network operates liner, parcel and dry bulk services,
supported by a fleet of multipurpose tweendeckers and handysize/
handymax bulk carriers, including specialized heavy-lift vessels
and newbuild tonnage. TBS has developed its franchise 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: Ferdinand V. Lepere Senior
Executive Vice President and Chief Financial Officer TBS
International plc Tel. 914-961-1000 InvestorRequest@tbsship.com
Investor Relations / Media: Nicolas Bornozis Capital Link, Inc. New
York Tel. 212-661-7566 E-mail: tbs@capitallink.com
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