Friday, March 25, 2011

Bulk Freight Shipping Lines Reach Agreement Over Receivership

Discussions Lead to Mutually Agreed Solution
Shipping News Feature

US – KOREA – The ongoing problems of the Korea Line Corporation (KLC) which went into protective receivership earlier this year, seem to have been partially relieved following today’s announcement that the bulk freight carrier has reached an agreement with its time charter partner, Eagle Bulk Shipping Inc., which is effective from the 15th March 2011.

The two companies have agreed an adjusted charter rate for ten vessels of $17,000 per vessel per day. Furthermore until the end of 2015 Eagle Bulk will retain all profits between $17,000 and $21,000 per day, after this figure any extra profits will be divided equally. There will be an equal division of profits after this date for anything above $17,000 per day until the conclusion of the charters which expire at the earliest at the end of 2018.

Similar agreements have been reached for two newly built vessels with KLC responsible for any shortfall in earnings and one vessel has been unaffected due to ongoing agreements with the ship’s sub-charterer. Eagle Bulk say they expect to receive all unpaid time charter hire charges at originally contracted rates for the period beginning the day after KLC received rehabilitation protection on February 15, 2011 to March 15, 2011.

The agreements have come about after full and frank negotiations which Eagle tell us were a result of an ‘extensive and highly constructive dialogue’ between the two parties no doubt to the relief of all concerned in what has been a difficult period for the dry bulk freight market. The Baltic Dry Index closed yesterday at 1583, over 500 points above its recent low in early February when KLC were at their lowest ebb.

Photo:- The 48,000 tonne Kite an Eagle Bulk Handymax class vessel.