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 November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Port of Houston Expecting Record Year

The Port of Houston Authority is expecting 2014 to close as a banner year for the port, with 34 million tons of cargo handled through November, Executive Director

Hapag-Lloyd Completes CSAV Merger Capital Increase

Hapag-Lloyd completed the planned capital increase of EUR 370 million (approximately $452.5 million) as part of the business combination with the Chilean shipping

Finance

Oil is on the Rise

Oil prices rose in early trading on Monday as Asian markets opened strongly into a holiday-shortened week and as consensus spread that Brent crude prices would

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

US Plans to Shut Royalty Loophole on Coal Exports

U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia according to reforms proposed by the Interior Department on Friday.

News

Port Workers in Argentine Grain Hub End Strike

Port workers in part of the Argentine grains hub of Rosario lifted a work stoppage on Friday, only a day after they went on strike over demands for higher year-end bonuses, a union official said.

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

Vessels

Damen Outfitting First of Nine Bahamas Patrol Boats

The first of nine Damen Stan Patrol 3007s ordered by the Royal Bahamas Defense Force has arrived at Damen Shipyards Gorinchem in the Netherlands for outfitting.

MARAD Publishes US ATB, ITB Database

The U.S. Maritime Administration (MARAD) released what it is calling a first-of-its-kind public database that chronicles U.S.-flagged, privately owned domestic

New Chinese Shipyard Launches First Ship

The new shipyard facility of Honghua Offshore Oil & Gas Equipment Company in Jiangsu, China, has launched its first ship, an IMT982 Platform Supply Vessel. The vessel,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Offshore Oil Pipelines Port Authority Salvage Ship Electronics Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.2440 sec (4 req/sec)