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Western Bulk becomes Bulk Invest, struggles to survive

Western Bulk becomes Bulk Invest, struggles to survive
Cash-strapped Western Bulk has become Bulk Invest following the sale of its chartering arm, and is still seeking solutions to its financial woes with its creditors.

Western Bulk Chartering has been sold to Kistefos Equity Operations, owned by Kistefos, the largest shareholder in Western Bulk.

On 8 February the company transferred all its shares in Western Bulk and all its bonds in a NOK300m unsecured bond issue. Bulk Invest has received the first installment of $10m for the shares, with remainder to be paid on 2 March.

Bulk Invest will continue to focus on a survival, which could include a rights offering.

“The company will initiate dialogue with its creditors to explore and pursue potential solutions,” the company said.

Bulk Invest also warned: “If no acceptable solution to the company with the remaining creditors is achieved, the basis of the company's continued operations will be reassessed."

The company is currently running at cash burn rate of $4 - $5m per month, however, it said: “The board of directors of the company will regardless diligently and continuously evaluate whether the basis for continued operations exists.”

To this end it is considering a possible rights issue which it announced on 20 November 2015, however, Kistefos, says that in the current circumstances its subscription and guarantee undertaking no longer applies.