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. "

(www.starbulk.com)

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

People & Company News

Evergreen Naming Ceremony for EVER LUNAR

Evergreen Group held the naming ceremony for EVER LUNAR today, the seventh of its L-type vessels to be built by CSBC Corporation in Taiwan. The ceremony, which was officiated by Ms.

Es Sider Port Oil Tanks On Fire

A fire at an oil storage tank at Libya's Es Sider oil port has spread to two more tanks, officials said on Friday. The first oil tank was hit during clashes

7th World Travel Award for DP World

DP World’s Mina Rashid port has successfully defended its title as the World’s Leading Cruise Port, for the seventh consecutive year, at the prestigious World Travel Awards 2014.

Finance

Doubts Linger Over Chinese-backed Nicaragua Canal

When one of the poorest countries in the Americas and a little-known Chinese businessman said they planned to undertake one of the biggest engineering projects in history,

ACP Receives $740 mln in Cost Overrun Claims

The consortium working on the extensive Panama Canal expansion has submitted two new claims for cost overruns of almost $740 million, the canal administrator said on Friday.

Oil slides, Brent tests $60

Global oil markets fell again on Wednesday in holiday-thin trade, extending more than a week of see-saw volatility as traders jousted over whether a growing supply glut had been fully priced in.

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Offshore Oil Pipelines Pod Propulsion Salvage Ship Repair Shipbuilding / Vessel Construction 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: 0.1661 sec (6 req/sec)