In February 2016, Star Bulk has agreed to defer the delivery of five Newcastlemax vessels from 2016 to 2017 and 2018: three vessels were deferred from Q1 2016 to Q1 and Q3 2017, and two vessels were deferred from Q1 and Q2 2016 to Q1 2018. Consequently, $188 million of CAPEX originally due in 2016 has been deferred to 2017 and 2018.
During the last 12 months, the company has pushed back the delivery of 16 vessels for 124 months in aggregate, or eight months per vessel.
Star Bulk has also agreed to terminate two shipbuilding contracts, reducing the newbuilding program by four vessels in total. In addition, the company has agreed to adjust its remaining CAPEX obligations for the remaining vessels under construction, resulting in an aggregate benefit of $223.1 million in CAPEX out of which $80.5 million in equity funding requirements.
Since December 2015, the company has agreed to sell 10 vessels with total equity proceeds of $56 million after repayment of debt and CAPEX obligations. The vessels will be delivered to their new buyers during the first four months of 2016.
Over the last 14 months, the company has disposed of 23 vessels: six newbuilding, six modern and 11 old vessels for total equity proceeds of $86.2 million after repayment of debt and CAPEX obligations.
On February 17, 2016 the company announced the formation of a Capesize pool, Capesize Chartering Limited (CCL) with BOCIMAR INTERNATIONAL NV, GOLDEN OCEAN GROUP LIMITED (GDOCF)
and C TRANSPORT HOLDING LTD. Star Bulk said
it currently has seven vessels in the pool and expects to benefit from the improved scheduling ability that the joint marketing efforts of CCL provide.
The company noted it has proactively raised $425 million through two public equity offerings in January and May of 2015, while in November 2014, it has completed the issuance of $50 million Senior Notes due in November 2019.
Star Bulk’s CEO, Petros Pappas
, said, “The last 12 months have proven to be the most challenging market for dry bulk shipping over the last 30 years, with lackluster demand and persistent oversupply. Amidst such a depressed market, our top priority has been and remains, to improve our liquidity position and strengthen our balance sheet and financial runway.
“On the newbuilding front, we have reached agreements with our ship building yards and our lease financing institutions not to take delivery of four vessels. In addition, we have agreed to adjust the remaining CAPEX obligations for the remaining vessels under construction, saving in aggregate $223.1 million of CAPEX. We have also agreed to defer $188.0 million of CAPEX obligations for five Newcastlemax vessels from 2016 to 2017‐2018.
“Furthermore, the recently announced sale of 10 vessels will boost our current liquidity position by $56 million after taking into account existing indebtedness and future CAPEX obligations. The above initiatives are complemented by $21.0 million savings through cost cutting measures, with our average daily OPEX per vessel for 2015 reduced by 11% y‐o‐y and our average Net Cash G&A Expenses per vessel reduced by 21.5% over the same period.
“Overall, the measures that we have taken to strengthen our balance sheet and improve our liquidity position during the last months, through equity raisings, vessel disposals and cancelations, delivery deferrals, purchase price reductions and cost cutting efforts are over $660 million.
“It is encouraging that the ship owners’ response to the challenging market through supply adjustment has been unprecedented. In the first two months of 2016, approximately 9 million dwt has been sold for demolition, compared to 30 million dwt for the full year of 2015. Owners discipline in 2016 and 2017 is key for a sustainable dry bulk recovery.”