Star Bulk Carriers Corp. has entered into agreements with CSSC (Hong Kong) Shipping Company Limited to bareboat charter, two fuel efficient Newcastlemax dry bulk vessels.
These vessels, each with a cargo carrying capacity of 208,000 deadweight tons, are currently under order at SWS, at a monthly hire rate for each CSSC vessel ranging between $371,000 to $410,800 plus LIBOR. The Bareboat Charters have a 10-year term and are expected to commence when the vessels are delivered to Star Bulk, which isscheduled for November 2015 and February 2016, respectively.
Under the terms of the Bareboat Charters, Star Bulk is required to pay CSSC $11.3 million and $11.8 million, representing the 20% of the construction price of $56.5 million for Hull 1372 and $59.0 million for Hull 1371 respectively. The upfront hires for each CSSC Vessel will be paid in two equal installments for each CSSC vessel, the first of which shall be due shortly and the second installment shall be due upon the completion of the steel-cutting stage of the construction of each CSSC Vessel.
Under the terms of the Bareboat Charters, Star Bulk has options to purchase the CSSC Vessels at any time, which are exercisable monthly, against a predetermined, amortizing balance payment whilst it has a respective obligation at the expiration of the bareboat term. Upon the earlier of the exercise of the purchase options or the expiration of the Bareboat Charters, Star Bulk will own the CSSC Vessels.
This structure effectively allows the Company to acquire the CSSC Vessels, upon the completion of the Bareboat Charters, with the equivalent of 80% debt financing as a percentage of the Construction Prices in the preceding paragraph.
Star Bulk Carriers, February 26, 2014