Star Bulk FFA Transactions, Private Placement

Tuesday, January 27, 2009

Star Bulk Carriers Corp. (Nasdaq: SBLK), a global shipping company focusing on the transportation of dry bulk cargoes announced that the company has sold contracts in the Freight Forward Agreement ("FFA") market on the Capesize index for Calendar 2009 for a total of 360 calendar days with an average rate of approximately $19,900 per day.

The Capesize index refers to a modern Capesize dry bulk carrier. The contracts are intended to serve as an approximate hedge for one of the company's Capesize vessels trading in the spot market for 2009, effectively locking-in the approximate amount of revenue that the company expects to receive from such vessel for the period.

Similarly, the company announced that it has sold FFA contracts on the Capesize index for Calendar 2010 for a total of 60 days at an average rate of approximately $25,225 per day. All of the company's FFA transactions are cleared trades and are intended as approximate hedges to its physical exposure in the spot market.

The company recently filed a universal shelf registration statement, which has not yet been declared effective, to register an aggregate of $250m of securities in order to provide flexibility to the Company to raise capital in the future as management and the board of directors may determine.

The company also announced the completion of the previously announced private placement to insiders who had committed to reinvesting the cash portion of their dividend paid in respect of the third quarter 2008 into shares of Star Bulk. A total of 818,877 common shares were issued pursuant to the private placement. The Company included the resale registration of shares and warrants held by insiders and a former officer of Star Maritime Acquisition Corp. who had piggy bac" registration rights under various agreements, as well as shares issued to insiders and employees pursuant to the Company's equity incentive plan.

The company also announced that the vessel Star Sigma, which was on time charter to a Japanese charterer at a gross daily charter rate of $100,000/day until March 1, 2009 (earliest redelivery), was redelivered earlier to the company pursuant to an agreement whereby the charterer agreed to pay the contracted rate less $8,000 per day, which is the approximate operating cost for the vessel, from the date of the actual redelivery in November 2008 through March 1, 2009.

The company has received payment in full and the vessel is currently trading in the spot market on a voyage charter to BHP Billiton at a gross time charter equivalent rate of approximately $14,100 per day, resulting in a revenue for the vessel that is effectively higher than it would have been under the original charter at the rate of $100,000 per day. The vessel is still committed to a 3-year time charter at a gross daily average charter rate of $63,000/day commencing in March 2009.

Akis Tsirigakis, CEO of Star Bulk said "We are happy to announce our entry into FFA contracts aiming to enhance our fleet coverage and cash flow visibility for 2009 and 2010. Moreover, the pre-payment of the charter hire for the Star Sigma enhanced our cash position and liquidity, adding strength to our balance sheet. We continue to explore constructive ways to enhance and secure the Company's revenues in response to this period of uncertainty in the shipping markets. In this context we are pursuing various employment options for our vessels that include physical charters, contracts of affreightment (COA), charter extensions, FFA contracts and pool employment. We are also pleased to have completed the private placement to insiders who re-invested their cash dividend proceeds, clearly demonstrating their confidence in the Company's prospects. "


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

People & Company News

SCI Bags 3rd Best Enterprise Award

The Shipping Corporation of India Ltd., has won the 3rd Prize for the ‘Best Enterprise Award’ in the 26th Regional Meet organised by the Forum of Women in Public Sector (WIPS), Western Region.

NYK Joanna Rescues Fishermen off Philippines Coast

On October 3, NYK Joanna, a containership operated by NYK, rescued seven fishermen in distress off the coast of the Philippines. While the NYK vessel was sailing on October 3 from Vungtau,

Noreco CEO Quits

Norwegian Energy Company ASA (Noreco) announces that Tommy Sundt is stepping down as CEO of Noreco ASA. Since joining Noreco in September 2014, Tommy Sundt


Noreco CEO Quits

Norwegian Energy Company ASA (Noreco) announces that Tommy Sundt is stepping down as CEO of Noreco ASA. Since joining Noreco in September 2014, Tommy Sundt

BSM Completes Global Management Program

Bibby Ship Management has successfully completed its second Global Management Programme which, it says, has helped to develop the management skills of all its

DP World Leading M.E. Investor - MEIRS Awards

Global marine terminal operator DP World has collected an impressive four awards including the Grand Prix of ‘Leading Corporate for Investor Relations in the

Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Ship Repair Ship Simulators Shipbuilding / Vessel Construction 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: 0.2142 sec (5 req/sec)