Star Bulk to Acquire 34 Drybulk Vessels

By Joseph R. Fonseca
Thursday, August 21, 2014
Star Bulk Carriers Vessel

 

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 operating vessels for an aggregate of 29.917 million shares of common stock of Star Bulk and $288.39 million in cash (the “Vessel Purchase Transactions”.

Overview of the Vessel Purchase Transactions Through the Vessel Purchase Transactions, the Company expects to acquire 34 secondhand drybulk carriers, consisting of 6 Capesize vessels, 14 sistership Kamsarmax vessels, 12 Panamax vessels and 2 Handymax vessels mainly built at shipyards in Japan. The Vessels will be acquired in a series of closings which the Company 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.

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. (the “Oaktree Investors”), and entities affiliated with Angelo Gordon & Co. (the “Angelo Gordon Investors”), 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 Board of Directors of the Company, 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.

Benefits of the Transaction, upon completion:
* 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 approximately11.85 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.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Bulk Carrier Trends

Diana Shipping Enters Contract with SwissMarine

Diana Shipping Inc., through a separate wholly-owned subsidiary, has entered into a time charter contract with SwissMarine Services S.A., Geneva, for one of its Ice Class Panamax dry bulk vessels,

Panamax Vessel Demand Keeps Baltic Index Up

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Monday for a fourth straight session as higher demand

Uncertainity Plagues Seaborne Iron Ore Shipments

Chinese iron ore imports account for around two thirds of global seaborne iron ore shipments, making it the key driver of Capesize employment. Clarksons Research Report.

News

Evinrude Expands E-Tec G2 Horsepower

BRP (TSX:DOO)announced today the release of the next generation of Evinrude E-TEC G2 models with horsepower ranging from 150 to 200, the E-TEC G2 150, 150 H.O., 175 and 200.

Construction of new Stockholm Norvik Port Begins

For Hutchison Port Holdings (HPH), one of the world’s leading container terminal operators, Stockholm is strategically important. In April the final permit was

Wärtsilä, Zamakona Yards Join forces in Canary Island

Wärtsilä, the marine industry's leading solutions and services provider, is enhancing its service offering by participating in a new maintenance hub in the Canary Islands.

Vessels

AMSA : ECDIS Related Detentions on the Rise

ClassNK has been informed by Australian Maritime Safety Authority (AMSA) that during PSC inspections it has been increasingly reported that vessels have been detained

MSC-Peel Ports Partner on Liverpool2 Trials

Marine-based commissioning work is now underway at Liverpool2, with Mediterranean Shipping Company (MSC) committing vessel support to Peel Ports to help make the trial a success.

Navig8 Chemical Adds New Tanker from Kitanihon

Chemical shipping company Navig8 Chemical Tankers Inc. has taken delivery of its first stainless steel chemical tanker, the Navig8 Sirius, from Japanese shipbuilder Kitanihon Shipbuilding Co.

Mergers & Acquisitions

MSC-Peel Ports Partner on Liverpool2 Trials

Marine-based commissioning work is now underway at Liverpool2, with Mediterranean Shipping Company (MSC) committing vessel support to Peel Ports to help make the trial a success.

CMA CGM Crosses 90% Ownership Threshold in NOL

CMA CGM S.A.  has crossed the 90% ownership threshold in Neptune Orient Lines Limited (NOL).    Following its all-cash voluntary conditional general offer (Offer)

Beier Purchases South Coast Electric Systems

Beier Integrated Systems (Beier) informs it has purchased South Coast Electric Systems (SCES) from American Electric Technologies (AETI), expanding the its manufacturing

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Offshore Oil Pipelines Port Authority Ship Simulators 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: 0.1918 sec (5 req/sec)