NewLead Holdings Ltd., an international shipping company owning and operating tankers and dry bulk vessels, today announced that on August 12, 2011, First Business Bank (“FBB”) and NewLead entered into a sale agreement for two vessels, the Newlead Prosperity and the Newlead Spartounta.
Pursuant to the terms of the sale agreement, the Company will cooperate with FBB to proceed with the immediate sale of Newlead Spartounta no later than September 13, 2011 and the sale of Newlead Prosperity by auction or judicial sale. In return of the aforementioned agreement, FBB has agreed to cancel the corporate guarantees by NewLead of its debt and share pledges in respect to these two loans until the completion of these sales, at which time the guarantees and share pledges shall be unconditionally and irrevocably released and cancelled.
As a result of prolonged challenging market conditions, NewLead has entered into discussions with its lenders to develop an interim plan that will improve liquidity and operating flexibility while developing a sustainable capital structure. The Company has appointed Moelis & Company and Fried, Frank, Harris, Shriver & Jacobson LLP as its advisors to assist with this process. The Company is seeking waivers from its lenders to various restrictive covenants and an agreement that they will forbear from exercising remedies under their respective debt arrangements.
Although the Company is optimistic that it will reach an agreement with its lenders on the short-term waivers of defaults and on the terms of the restructuring of the Company’s indebtedness, no assurances can be provided that these agreements will be concluded.
Michael Zolotas, President, Chief Executive Officer and Interim Chief Financial Officer of NewLead , stated, “While we are facing very difficult market conditions, we are committed to continue working with our lenders and other commercial partners to develop a sustainable capital structure that will ensure the long term prospects of NewLead.”
[mappress]
Source: NewLead Holdings, August 16, 2011