Globus Maritime Ltd (NASDAQ:GLBS) recently announced reaching agreements with two of its creditors in what is expected to ease some debt pressure on the shipping company. It’s been tough for Globus in the recent times as debt balloons while revenue shrinks. But the company is getting some of its lenders to relax terms of loan covenants to allow it some breathing room.
In April, Globus Maritime Ltd (NASDAQ:GLBS) and two of its lenders namely DVB Bank and HSH Nordbank AG reached agreements involving amendment and waiver of certain original loan terms. With DVB Bank, Globus renegotiated terms relating to their loan agreement originally signed June 2011. With Nordbank, Globus renegotiated terms of the credit agreement originally signed in February 2015.
Globus Maritime Ltd Management praise agreements
According to Globus Maritime Ltd (NASDAQ:GLBS), the renegotiations got it waivers on certain loan commitments and relaxed terms for some outstanding loans. In particular, Globus’ CEO, Athanasios “Thanos” Feidakis, said that the agreements resulted in waiver or relaxation of terms relating to financial covenant for March 2016 to March 2017. Moreover, the shipper secured a deal to defer the repayment of principal due in 2016.
Getting the lenders to agree to favorable financial covenant terms is a major score for Globus. Weak prices and soft demand for shipping services have taken a heavy toll on shipping companies and Globus is no exception. The outcome of the difficult operating environments is that debts and cost of debts have soared, thus complicating the recovery of the shipping companies.
Globus Maritime Ltd Financials
Globus Maritime Ltd (NASDAQ:GLBS)’s revenue for the quarter ended September fell to $3.17 million from $3.26 million in the previous quarter and halved from a year ago quarter. As headline figure contracted sequentially in the September quarter, costs revenue ballooned to $2.79 million from $2.70 million in the previous quarter.
Globus Maritime Ltd (NASDAQ:GLBS)’s long term debt stood at $77.7 million at the end of September quarter compared to $82.5 million a quarter earlier and $84 million from corresponding quarter a year earlier.