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TBS International gets forbearance agreement extension until Feb. 15
By Jennifer Chiou
New York, Dec. 2 - TBS International plc reached an agreement in principal with lenders to extend the forbearance agreement in connection with the restructuring of the company's bank debt to Feb. 15 from Dec .15, according to a news release.
The agreements, subject to final documentation and approvals, provide for the continued operation of the company's business under current management, continued timely payment in full of all trade creditors, satisfaction of the claims of certain lenders, restructuring of the terms of debt held by the company's key lenders and no residual value for the existing common and preferred stock, the release stated.
TBS said that during the extended forbearance period, the lenders will forbear from exercising their rights and remedies which arise from the company's failure to make interest and principal payments when due and any failure to comply with certain of its financial covenants.
The Dublin, Ireland-based transportation service company added that it expects to reach agreements with lenders on the ongoing defaults under its various financing facilities.
"We are pleased to have reached these agreements in principle because we believe it will ensure continued, uninterrupted operation of the company's fleet and the company's continued ability to meet its customers' needs on a timely and efficient basis," chairman, chief executive officer and president Joseph E. Royce said in the release.
TBS previously said that negotiations with its bank group "continue to take a positive tone."
In November, the company was continuing to explore the possibilities of an extension to allow negotiations to continue and, according to a prior release, the lenders made it clear that they would not agree to a restructuring under which any value is attributed to common equity.
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