Horizon Lines said it will make up its missed Aug. 15 interest payment on $330 million of its convertible notes when it announces a deal with lenders in “the near future.”
The largest domestic carrier said it is exercising a 30-day grace period related to the semi-annual interest payment on the notes, said Horizon spokesman Jim Storey.
Charlotte, N.C.-based Horizon has been scrambling to stabilize its finances and avoid covenant defaults since pleading guilty this year to a felony antitrust charge for price-fixing in its Puerto Rico service.
Horizon expects to finalize a deal with it bondholders in the next several weeks. It also expects to work out amendments or waivers to avoid breaching covenants on more than $270 million in senior secured debt by the end of the third quarter, when leverage ratios on Horizon’s loan covenants tighten.
Horizon Lines lost $7 million in the second quarter compared to a $4.1 million profit in the same period a year ago, as its trans-Pacific business struggled because of higher fuel costs and soft rates.