Star Bulk Defers More Ship Deliveries

Posted by Eric Haun
Tuesday, March 01, 2016
File photo: Star Bulk

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 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.”

People & Company News

MN100: R.W. Fernstrum & Company

The Company: R.W. Fernstrum & Company set the standard in marine heat exchangers over 65 years ago, building a reputation focused on innovation. Today, its commitment is to continual improvement,

MN100: McDonough Marine Service

The Company: Bernard P. McDonough created the company in 1945 by leasing barges from his construction company into the marketplace. Through a series of new and used barge additions,

MN100: MarineCFO

The Company: Founded in 1992, UA Business Solutions was a pioneer in the field of Enterprise Resource Planning (ERP) and an early Microsoft Partner. The ERP evolution


Heavy Lifting: Giant Pipe Racks Shipped for New FPSO

From Brazil to China and then back to Brazil, five pipe racks and three modules weighing a total of 1,871.51 metric tons and measuring 24,075 m³ will be transported

SMM 2016: World Premieres from around the Globe

Some 50,000 trade visitors from the whole of the world are expected in Hamburg for the start of SMM in less than two weeks. And once again, it is fully booked – with a total of more than 2,

Tuco’s New Arctic Workboat to Debut at SMM

Danish producer Tuco Marine said it will reveal a new Arctic workboat daughter craft at next month’s SMM in Hamburg.   Many arctic patrol vessels, icebrakers

Ship Sales

COSCO Delivers PSV and Two Jack-up Rigs

Cosco (Dalian) Shipyard Co., Ltd., a subsidiary of its 51 percent owned Cosco Shipyard Group Co., Ltd., has delivered two jackups to the Foresight Group of companies

European Owners Lead in Buying Up Secondhand Tonnage

With European owners leading the pack in buying up vessels, the sale and purchase market appears to have been notably active in recent years, reveals Clarkson Research Services Limited.

SCI to Buy Vessels for $134m

India's largest shipping company  Shipping Corporation of India (SCI) has earmarked Rs 900 crore ($134m ) capex for the current financial year even as business


China COSCO Falls to H1 Net Loss

China COSCO Holdings Co Ltd fell to a first-half loss hurt by a persistent slump in the global container market, the world's fourth largest container shipper said on Thursday.

Weak Freight Rates push Grindrod to H1 loss

Africa's biggest shipping group Grindrod reported a first-half loss on Thursday, pressured by low global growth and declining dry bulk shipping rates but it expects

Cosco Eyes Spanish port of Algeciras

Algeciras Bay Port Authority in southern Spain has put up a tender for its third container terminal, and China's Cosco Shipping Ports is already being mentioned as a fore runner candidate,


Iran Defends Encounter with US Warship

Iran's defence minister said on Thursday four of his country's vessels accused of harassing a U.S. warship were only doing their job, and Tehran would contront

Former HMS Illustrious Sold for Scrap

The former aircraft carrier HMS Illustrious will be recycled after 32 years of service, announced the U.K. Ministry of Defense (MOD) who sold the ship to Turkish

Tuco’s New Arctic Workboat to Debut at SMM

Danish producer Tuco Marine said it will reveal a new Arctic workboat daughter craft at next month’s SMM in Hamburg.   Many arctic patrol vessels, icebrakers

Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Pipelines Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar
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: 0.1785 sec (6 req/sec)