Drybulk shipper Excel Maritime Carriers Ltd intends to file for Chapter 11 bankruptcy, a regulatory filing showed, making it the latest victim of a downturn in the shipping industry.
Charter rates for dry bulk vessels have steadily declined since 2008 as dozens of new vessels ordered before the global financial crisis came into service after demand had fallen.
The slump, one of the worst ever faced by the industry, has caused a number of bankruptcies including Britain’s oldest, Stephenson Clarke Shipping Ltd, and Italian dry freight group Deiulemar Shipping.
Excel has started soliciting acceptances from its lenders for a prepackaged reorganization plan, supported by a steering committee of its secured lenders.
Excel would file a petition under Chapter 11 after the solicitation period, the filing showed.
The company, which owns and operates a fleet of 38 dry bulk cargo vessels, said it was no longer able to sustain its debt service obligations.
Excel, whose market capitalization was $43 million as of Monday close, said its obligations under its senior secured credit facility are about $771 million.
The company had $27.2 million in cash and over $1.03 billion in debt as of June 2012, according to Thomson Reuters data. (Reuters)