Star Bulk to Acquire 34 Drybulk Vessels

By Eric Haun
Tuesday, August 19, 2014
Photo: Star Bulk

Star Bulk entered into a definitive agreement with Excel Maritime Carriers Ltd., and as a result, will acquire 34 drybulk vessels for an aggregate of 29.917 million shares of common stock of Star Bulk and $288.39 million in cash.

Star Bulk Carriers Corp. announced today that it has entered into definitive agreements with Excel Maritime Carriers Ltd. pursuant to which the company will acquire 34 secondhand operating drybulk carriers, consisting of six Capesize vessels, 14 sistership Kamsarmax vessels, 12 Panamax vessels and two Handymax vessels mainly built at shipyards in Japan, for an aggregate of 29.917 million shares of common stock of Star Bulk and $288.39 million in cash.

The vessels will be acquired in a series of closings which Star Bulk expects to complete by the end of 2014. The closings are expected to occur on a vessel-by-vessel basis, in general upon reaching port after their current voyages and cargoes are discharged.

Upon completion of the vessel purchase transactions, Star Bulk's position as the largest U.S listed dry bulk company will be further enhanced, with a fleet of 103 vessels on a fully delivered basis and aggregate cargo-carrying capacity of approximately 11.85 million deadweight tons, the company said.

Star Bulk expects to use cash on hand, together with borrowings under a new $231 million secured bridge loan facility extended to the company by entities affiliated with the company's largest shareholder, Oaktree Capital Management, L.P., and entities affiliated with Angelo Gordon & Co., both current Excel shareholders, to pay the cash portion of consideration in the vessel purchase transactions. When the vessel purchase transactions are completed, and the Star Bulk shares forming part of the consideration are distributed to Excel's shareholders, the Oaktree investors would own 57.3% of Star Bulk's outstanding shares of common stock, and the Angelo Gordon investors would own 7.8% of Star Bulk's outstanding shares of common stock.

The vessel purchase transactions have been approved by the disinterested members of the company’s board of directors, based upon the recommendation of a transaction committee of disinterested directors established by the board of directors of the company, which considered the vessel purchase transactions on behalf of the company in coordination with the company's management team. The total consideration for the vessel purchase transactions of $634.91 million was determined based on the average of three vessel appraisals by independent vessel appraisers.

Star Bulk listed several benefits of the transaction:

  •  Enhances Star Bulk as the largest U.S. listed dry bulk company with a fleet of 103 vessels on a fully delivered basis with an aggregate cargo-carrying capacity of approximately 11.85 million deadweight tons, including 39 Capesize and Newcastlemax vessels and 20 Kamsarmax vessels (including 14 sisterships).
  • Provides greater commercial presence and additional economies of scale on technical operations.
  • Increases the total market capitalization of the company's common stock from $1.09 billion to $1.49 billion, assuming 29.917 million shares of common stock issued in the vessel purchase transactions, at the August 18, 2014 closing share price of $13.12 per share.

Petros Pappas, Chief Executive Officer of Star Bulk Carriers Corp., commented, “We are excited to announce these vessel purchases that, when completed, will expand our presence as the largest U.S. listed drybulk shipping company, and one of the largest dry bulk owners and operators globally. These transactions mark an important next step in the evolution of Star Bulk following our recent merger transaction with Oceanbulk. We believe that these vessel purchases are accretive to earnings and cash flow per share. We also believe that after these transactions are completed, Star Bulk will be well positioned to capitalize on an improving dry bulk shipping market with significant operating leverage to rising rates. Furthermore, as with our recent merger transaction with Oceanbulk, these transactions will preserve our cash resources, as it will be funded primarily with new equity determined on a net asset value to net asset value basis and a bridge loan from Oaktree and Angelo Gordon. This is consistent with our strategy to be an active consolidator in the dry bulk shipping industry, using moderate levels of debt.”

Seward & Kissel LLP is serving as legal counsel to Star Bulk in connection with the Transaction, Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as counsel to Excel and to the Oaktree Investors, Willkie, Farr & Gallagher LLP is serving as counsel to the special committee of Excel’s Board of Directors and to the Angelo Gordon Investors.

starbulk.com
 

Maritime Reporter August 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

A Great Passion for Small Ships

Gottfried Knöbel owns almost 1,500 miniature model ships, many of them are Hapag-Lloyd ships. How did he end up with this collection?   In a quiet residential district in Cologne,

Busan Port Names Woo Ye-jong as New CEO

The Busan Port Authority (BPA) announced Woo Ye-jong has been named as its new CEO, as appointed by the Korean Ministry of Oceans and Fisheries.   Woo took office on July 31,

USCG Hoists Ailing Man from Tug

A man believed to be suffering symptoms from a heart attack was medevaced from a tugboat Thursday morning.   A U.S. Coast Guard helicopter crew from Air Station Traverse City, Mich.

Ship Sales

G E Shipping delivers “Jag Aakash” to Buyers

The Great Eastern Shipping Company Ltd. delivered the new building Kamsarmax Dry Bulk Carrier “Jag Aakash” (81,600 dwt) to the buyers.  The vessel was contracted for sale in August 2015.

Hanjin Rolls Out First Philippine-made LPG carrier

Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), which operates the world's fourth shipbuilding facility in Subic Freeport Zone, unveiled the

Otto Marine Signs Contracts to Supply 2 AHTS Vessels

Go Offshore,  wholly-owned subsidiary of Otto Marine has entered into an agreement for two long-term anchor handling tug supply (AHTS) charter contracts worth USD25.

Finance

Greece Wants EU Funding to Tackle Migrant Influx

Greece will ask the European Union for about 700 million euros to build infrastructure to shelter the hundreds of refugees and migrants arriving on its shores daily, the government said on Thursday.

Asia-Europe Box Rates Soar Again

Shipping freight rates for transporting containers from ports in Asia to Northern Europe jumped 29 percent to $763 per 20-foot container (TEU) this week data from

G E Shipping delivers “Jag Aakash” to Buyers

The Great Eastern Shipping Company Ltd. delivered the new building Kamsarmax Dry Bulk Carrier “Jag Aakash” (81,600 dwt) to the buyers.  The vessel was contracted for sale in August 2015.

News

A Great Passion for Small Ships

Gottfried Knöbel owns almost 1,500 miniature model ships, many of them are Hapag-Lloyd ships. How did he end up with this collection?   In a quiet residential district in Cologne,

Busan Port Names Woo Ye-jong as New CEO

The Busan Port Authority (BPA) announced Woo Ye-jong has been named as its new CEO, as appointed by the Korean Ministry of Oceans and Fisheries.   Woo took office on July 31,

CTruk Delivers Wind Farm Support Vessel

Shipbuilder CTruk Boats, a manufacturer of composite wind farm support vessels (WFSV), has delivered the second workboat in a two-craft order from CWind.   The

Vessels

Enclosed Space Casualties Continue in Shipping Industry

Accidents relating to entry into enclosed spaces have resulted in a large number of deaths of both ship and shore personnel so far this year. David Nichol, UK P&I Club risk assessor,

New Energy-saving Windshield on MOL MARVEL

Mitsui O.S.K. Lines, Ltd. today announced that it has started demonstration tests of a new windshield for containerships, which has the potential to reduce wind resistance,

Hanjin Rolls Out First Philippine-made LPG carrier

Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), which operates the world's fourth shipbuilding facility in Subic Freeport Zone, unveiled the

 
 
Maritime Contracts Maritime Security Offshore Oil Pipelines Pod Propulsion Port Authority Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.7242 sec (1 req/sec)