US – KOREA – Following our recent report that bulk freight carrier Korea Line (KLC) had filed for protective receivership, one of the shipping lines leading suppliers has revealed how the situation has affected them. New York based Eagle Bulk Shipping Inc., owners of Supramax dry bulk vessels between 50 – 60,000 dwt, say they are owed to date approximately $7.3 million of charter hire from KLC, of which approximately $3 million was due and owing prior to KLC filing for rehabilitation on 25th January 2011.
All of Eagle Bulk's charters to KLC remain intact, though no charter hire payments are currently being received. Eagle Bulk has been advised by KLC that it expects to receive Court approval in South Korea in order to qualify for rehabilitation later this month, at which time KLC expects to resume charter hire payments.
To cover the period until the Court allows KLC to resume hire payments, and subject to Court approval, Eagle Bulk is working with KLC on arrangements to take over the employment of some of the affected charter vessels for an interim period. All such earnings would be used to offset the charter hire otherwise due from KLC.
With regard to the "Nighthawk," a newbuild vessel which is due to deliver to KLC later in the first quarter, Eagle Bulk and KLC have agreed in principle, again subject to Court approval, to defer the commencement of the charter in order to allow Eagle to employ the vessel for its own account for the time being. Eagle Bulk CFO Alan Ginsberg commented:
"We have been working diligently to mitigate potential losses associated with KLC's financial restructuring. Securing alternative employment for our vessels while KLC awaits court approval to resume charter payments constitutes an important step in this regard."
Photo: Bulk carrier MV Osprey courtesy of Eagle Bulk.
