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Star Bulk to acquire 15 vessels from Songa Bulk

Published by , Assistant Editor
Dry Bulk,

Yesterday, Star Bulk Carriers Corp. (Star Bulk) entered into a definitive agreement with Norwegian shipowner Songa Bulk ASA (Songa) pursuant to which the global shipping company will acquire 15 operating vessels for an aggregate of 13.725 million common shares of Star Bulk (the Consideration Shares) and US$145 million in cash. The cash portion of the consideration will be financed through proceeds of a new 5-year capital lease of US$180 million with China Merchants Bank Leasing with a margin of 280 bps, thus offering approx. US$35 million of additional liquidity for Star Bulk.  

The Vessel Purchase Transaction remains subject to, among other things, the approval of the Songa shareholders and other customary closing conditions, and is expected to be consummated in 3Q18. Upon completion of the Songa transaction, Arne Blystad will be appointed to the Board of Directors of Star Bulk and Herman Billung will join the management team of Star Bulk, contributing his approximately 30 years of dry bulk and capital market experience. Songa is expected to distribute the Consideration Shares to its shareholders following closing of the transaction.   

As a result of the contemplated transactions, shareholders of Songa are expected to own approximately 14.9% of the outstanding common shares of the company, and the pre-existing top 5 shareholders of the company would own approximately 38.7%, 4.4%, 3.9%, 1.0% and 1.0% of the outstanding common shares of the company respectively.

At the same time as the closing of the Vessel Purchase Transaction, the company intends to apply for a secondary listing of its common shares for trading on Oslo Børs, a regulated stock market operated by Oslo Børs ASA of Norway. The Consideration Shares will be restricted from trading in the US, including through the Nasdaq Global Select Market, for a period of six months following the distribution of the Consideration Shares to the shareholders of Songa unless they are sold pursuant to a transaction exempt from, or not subject to, registration under the Securities Act of 1933, as amended (the Act). After giving effect to the Vessel Purchase Transactions, Star Bulk will have a fleet of 108 vessels on a fully delivered basis, aggregate cargo-carrying capacity of approximately 12.26 million DWT and vessels with an average age of 7.1 years.

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