JUNE 11, 2013 — In a form 6K filed with the SEC today, bulker operator Excel Maritime Carriers Ltd. (NYSE: EXM), reports that it is proposing to file a joint prepackaged Chapter 11 Plan of Reorganization.

In the filing, Excel Maritime, which operates a fleet of 38 dry bulkers, says that charter rates for dry bulk vessels have been in a significant down cycle since 2008, and that its "revenues, profitability and value have been very negatively affected. Its value is significantly below the face amount of its debt, and it is no longer able to sustain its debt service obligations."

"With the assistance of its investment banker," says the filing, Excel Maritime "estimates its total enterprise value to be between $575 million and $625 million, with a mid-point of $600 million. However, the Company's obligations under its senior secured credit facility are approximately $771 million. Most of the Debtors are obligated on this facility, and the facility is secured by liens on substantially all the Debtors' assets. In addition, the Company is obligated on $150 million principal amount of unsecured convertible notes due October 15, 2027 and the Company also is obligated on several other obligations ... "

"Because the Company's senior secured lenders' claims are vastly under water, the lenders are entitled to receive almost all of the value of the reorganized Company. Indeed, the lenders have advised the Debtors that, pursuant to section 1111(b)(2) of the Bankruptcy Code, the lenders are electing to treat their claims as fully secured. Accordingly, under the Plan, the lenders will receive a restructured obligation in the amount of approximately $771 million plus 100% of the stock in the reorganized company. However, the terms of the restructured facility are below market, and the stock in the reorganized Company has option value only. The Debtors therefore estimate that the value of the consideration being afforded to the secured lenders under the Plan will afford the lenders an estimated recovery of only 77% of the face amount of their claims, which is based on the mid-point of the estimated enterprise value of the reorganized Company."

In a press release issued today, Excel Maritime said "it has reached an agreement in principle with a steering committee of its senior lenders on the terms of a financial restructuring to strengthen its balance sheet.

"Through this agreement, Excel Maritime expects to reduce its funded indebtedness and enhance its liquidity profile with the support of its senior lenders as it continues to provide first class service as a premier provider of dry bulk transportation services."

Under the terms of the agreement, says the press release, Excel will receive:

• Up to $50 million infusion of capital as a result of an agreement between the senior lenders and an entity affiliated with the family of Gabriel Panayotides, Excel Maritime's Chairman of the Board of Directors. Under the terms of that agreement the entity affiliated with the family of Mr. Panayotides will receive a majority of the equity in Excel.
• The release of an additional $30 million of currently restricted cash.

As part of the agreement, says the press release, the company's senior lenders' steering committee has agreed to an extension of the maturity of the company's senior secured facility through 2018 as well as significant amortization and covenant relief in line with the current outlook of the market. The senior lenders will receive an equity stake in the company, while current management continues to operate the business.

"We are pleased to have reached this agreement with our senior lenders' steering committee," said Mr. Panayotides. "Like other companies in our industry, Excel Maritime has been impacted by macro-economic conditions that have led to volatility and overall declines in charter rates. Securing up to $80 million of additional liquidity significantly strengthens our financial profile and positions Excel Maritime for future growth and success.

"We look forward to maintaining our strong relationships with charterers, reflecting the company's superior worldwide fleet operation and performance. As always, Excel Maritime remains committed to providing high-quality and efficient seaborne transportation services to our clients without any interruption in operations."