TBS in talks to modify credit facilities.
TBS International, the Nasdaq-listed dry bulk and tweendecker company, said it is discussing ?permanent modifications? with lenders that would lift the threat of a forced collapse as it faces the April 1 expiry of its loan to value covenant waivers.
TBS today reported a 2009 net loss of $67m, as revenues halved to $248m.
TBS reiterated its intention, first announced in November last year, of activating its $500m shelf registration to raise cash, via either high-yield bonds or follow-on shares.
Until its credit crunch is mitigated, TBS is forced to operate with a going concern qualification from its auditors.
TBS executive vice-president and chief financial officer Ferdinand Lepere said: ?The global financial crisis had an adverse impact on our vessel values and cash flows, which in turn adversely affected our ability to comply with certain covenants. We are in the process of discussing with our lenders permanent modifications to our credit facilities that would enable TBS to comply with these covenants through maturity.
?In addition, we are exploring the feasibility of alternative financing sources. Temporarily while we work through these issues with our banks, [the going concern qualification will remain]. When we put a more permanent solution in place with our lenders, this "going concern" will be lifted.?
Despite these challenges, TBS said it had actively, and in good faith, worked towards its own redemption in 2009. It paid down $53.5m in principal in addition to scheduled debt payments of $7.5m. On December 31, the company had a cash balance of $51m plus $8.7m in restricted cash for its newbuilding programme. TBS" net debt to capitalisation ratio was 35.8%, which Mr Lepere said was ?a modest figure for our industry?.
The company in 2007 ordered six Roymar-class multipurpose ships in China, the first of which was delivered last September. Three are expected this year and two in 2011.
TBS reported long-term debt of $351.2m at the end of 2009, but the company"s books showed negative working capital of $285.8m on that date.
The figures accompanied TBS reporting a fourth quarter net loss of $10.7m compared with a profit of $34.6m a year ago. For the whole of 2009, the company posted a $67m net loss, as against a profit of $191.8m a year ago. Revenues for the quarter and for the year halved, to $66.6m and $248m respectively.
TBS chief executive Joseph Royce said these figures were ?not unexpected? in the context of 2009. He added: ?They reflect the normal progression of the recovery of dry cargo ocean transportation from the depths of the severe global recession we experienced. There are already signs of a gradual yet fragile economic recovery around the world.
?Our TBS liner and parcel services, that primarily transport steel parcels, general and project cargo, began their recovery during the fourth quarter, which proved to be our best quarter in 2009. This recovery is gaining momentum as we enter 2010.?
With its 48-strong fleet, TBS prides itself on its unique product offering. The company specialises in tweendeckers and multipurpose ships that can transport high-value project cargoes one way and conventional dry cargo on the backhaul, and which are small enough to provide an effective tramp service in small harbours. TBS also provides customised project logistics services