Star Bulk Sees Worst Quarter in 30 Years

Athens-based dry bulk shipping company Star Bulk Carriers Corp. reported its net loss reached USD 48.8 million for the first quarter of 2016, against a net loss of USD 40.2 million seen a year earlier, as the company marked its worst quarter in the last 30 years.

“The first quarter of 2016 was the worst of the last 30 years, as freight rates remained below operating costs and vessel values reached new lows across all dry bulk vessel classes,” Petros Pappas, Chief Executive Officer of Star Bulk, said.

Furthermore, Star Bulk that it reached an agreement with its lenders to amend the principal repayment schedule of the loans incurred under the senior secured vessel financing credit facilities, as the company aims to preserve liquidity well into 2019.

“In order to facilitate our negotiations with all banks, we have recently entered into standstill agreements with all lenders,” the company said, adding that the lenders have waived its obligation to comply with certain covenants of the facilities and Star Bulk will not be required to make any debt principal payments until August 31, 2016.

The company’s operating loss for the first quarter was at USD 34.9 million, against an operating loss of USD 33.9 million seen in the same period in 2015.

“We continue implementing cost containment initiatives and maximizing internal efficiencies, resulting in our average daily Opex per vessel excluding pre‐delivery expenses being reduced by 19% y‐o‐y to USD 3,591,” Star Bulk said.

On June 6, Star Bulk took delivery of the Newcastlemax vessel Star Libra, which is financed under a bareboat charter accounted for as a capital lease, from CSSC (Hong Kong) Shipping Company Limited, (CSSC). The company also expanded its fleet with the Capesize vessel Star Taurus, which was sold to a third party pursuant to a preexisting agreement upon its delivery from the shipyard.

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