Marine Link
Tuesday, October 25, 2016

Star Bulk Proposes $75 million Backstopped Equity Rights Offering

May 2, 2013

Star Bulk Carriers Corp. announced that its Board of Directors approved a backstopped equity rights offering, which will allow the company to raise equity capital through the sale of its commonshares. The proceeds are expected to be primarily used for orders for fuel-efficient dry bulk vessels with some of the proceeds being reserved for working capital and general corporate purposes.

The company said it plans to raise gross proceeds of $75 million through a backstopped equity offering of 14,018,692 common shares only to holders of record of its common shares as of the close of business on May 15, 2013. In connection with this offering, the company will distribute, at no charge, to the record date holders one non-transferable subscription right to purchase the offered shares for each common share owned on the record date.
For each subscription right, a record date holder will be entitled to purchase 2.5957 common shares at a subscription price of $5.35 per share, which is referred to as the subscription privilege. The per share subscription price was determined by Star Bulk’s board.

The offering is backstopped by investment funds managed by Oaktree Capital Management L.P. or its affiliates, a Los-Angeles-based investment firm with approximately $77.1 billion of assets under management as of December 31, 2012, investment funds managed by Monarch Alternative Capital LP, a New-York-based investment firm with approximately $5.5 billion of assets under management, Blue Shore Global Equity Fund L.P., Far View Partners L.P. and other third party investors and existing shareholders, including certain of our directors including Ms. Milena Pappas, and our executive officers, including our Chief Executive Officer, Chief Financial Officer and Chief Operating Officer. Subject to certain conditions, Oaktree and Monarch will each have the right to nominate, subject to the approval of the company’s nominating committee, one director for the board.

In consideration for providing its backstop commitment, the company has agreed to issue to each backstop investor that is not an affiliate of the company immediately prior to the completion of the rights offering a number of additional common shares equal to 3% of its backstop commitment . In addition, the company has guaranteed certain backstop investors minimum participation amounts which, depending on the participation level of the record date holders, could cause the amount of shares to be issued and the gross proceed s raised to exceed $75 million.

Evercore Partners (EVR) is acting as financial advisor to the company, and Seward & Kissel LLP is acting as the company’s legal advisor. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as Oaktree’s legal advisor, and Willkie Farr & Gallagher LLP is acting as Monarch’s legal advisor.

The company has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) with respect to this rights offering. Subject to review of the registration statement by the SEC, the company intends to commence the rights offering during the second quarter of 2013. The subscription rights will expire worthless 20 business days after the commencement of the rights offering, unless the company extends the rights offering period or the rights offering is terminated.

A copy of the prospectus, the registration statement and additional materials related to the rights offering are expected to be mailed following the effectiveness of the registration statement to holders of the company’s common shares as of the record date. Before you invest, you should read the prospectus and the registration statement, including all of the documents incorporated by reference therein and other documents the company has filed with the SEC for more complete information about the company and this offering. You may obtain these documents for free by visiting EDGAR on the SEC Web site at Alternatively, the company will arrange to send you the registration statement, including the prospectus if you request it by calling the information agent for the offering, Advantage Proxy Inc., toll-free at 877-478-5038 or if you are a bank of broker, 206-870-8565.

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