Star Bulk Carriers Corp. (NASDAQ: SBLK) announced that it has entered into a time charter agreement with Rio Tinto for the Star Aurora, a capsize vessel of 171,199 dwt, built in 2000 in Japan, for a period of about three years at a gross daily rate of $27,500. The vessel was recently purchased for $42.5m and is expected to be delivered to its new charterers in the fourth quarter 2010. Star Bulk will finance the acquisition with a mix of own cash and bank debt, has received offers for debt financing of up to 60% of the vessel's price at favorable financing cost and terms and expects to have agreed such financing within the second quarter of 2010.
Akis Tsirigakis, President and CEO of Star Bulk, commented: "We continue our steady steps to renew and grow our fleet in conjunction with our strategy of stable employment with quality counterparties. We are also pleased to see senior debt lenders demonstrably support our acquisition plans via offers of favourable financing terms. The desirable elements are now in place, that is, competitive acquisition price, quality vessel, good contracted employment, quality counterparty and competitive financing. Currently, our fleet is contracted for 92% of 2010 and 57% of 2011 operating days, amongst the highest contract coverage, giving future earnings visibility. We continue to focus on enhancing shareholder value supported by our strong balance sheet and liquidity."