TROUBLED Horizon Lines says it will fail to meet its default interest payment of US$330 million in convertible senior notes once restructuring is set out with bondholders in a 30-day grace period from August 15 deadline, said spokesman for the carrier Jim Storey.
The Charlotte, North Carolina, ocean carrier has defaulted on payments throughout 2011, said Newark's Journal of Commerce. This is a result of a $45 million fine for price-fixing on the Puerto Rico trade. Its second quarter saw its profit plummet to a $7 million loss compared to same period 2010 profit of $4.1 million.
To avoid breaching covenants on more than $270 million in senior secured debt, it hopes to secure amendments or waivers before end of third quarter when leverage ratios on Horizon's loan covenants tighten.
Softening of rates and high oil prices have further hurt the company that have spent the year skating close to bankruptcy.
Source : HKSG, 22.08.11.
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