Oslo-headquartered dry bulk shipping operator Western Bulk Chartering will launch an offering on February 27 to raise USD 18 million in an effort to strengthen the book equity and cash position.
The equity will be raised from the company’s existing shareholders in a private placement.
“The transaction is backed in full by a subscription and guarantee agreement from the two largest shareholders; Kistefos AS and Ojada AS,” the ship operator said.
The offering is expected to be completed by the end of March 2017.
The announcement comes on the back of the company’s financial results for 2016 which show that rate level improvements in the Atlantic basin helped Western Bulk Chartering to narrow loss for the fourth quarter of 2016.
The company posted a lower loss of USD 2.6 million in 4Q 2016, compared to a net loss of USD 7.4 recorded a quarter earlier. However, the firm suffered a full-year loss of USD 20 million in 2016, compared to a profit of USD 7.2 million recorded in 2015.
“I am pleased to see that the positive development in our margins and the operated fleet continue and that the dry bulk market has shown some signs of life again during Q4 2016, with substantial rate improvements in the Atlantic basin. This basin difference and volatility in rates increase the opportunities for the group,” Jens Ismar, Chief Executive Officer of Western Bulk Chartering, said.
Western Bulk Chartering’s operating performance improved as the net time charter (NTC) result rose from USD 0.9 million in Q3 2016 to USD 2.2 million in Q4 2016. At the same time, the firm’s operating fleet increased from 126 vessels in Q3 2016 to 132 vessels on average in Q4 2016.
The company said that 2017 has started with a continued positive trend for its operating performance, as January NTC result of USD 1.8 million was the best monthly NTC result since the beginning of 2016.
In its outlook for 2017, Western Bulk Chartering expects the market to remain challenging, but is likely to yield somewhat better average rates than in 2016. In line with the group’s improved performance during second half of 2016 and in January 2017, the operating performance is expected to be better in 2017 than in 2016, enabling the company to return to profits in 2017.