Owner and operator of dry bulkers GoodBulk Ltd has entered into an agreement to acquire 7 to 13 Capesize dry bulk carriers from entities managed by CarVal Investors.
Funds managed by CarVal Investors will receive for the initial 7 vessels up to 10.5 million common shares in GoodBulk, with USD 61 million of existing borrowings expected to be refinanced under current and new GoodBulk credit facilities.
Upon completion of the base transaction of 7 Capesize vessels, GoodBulk will control a fleet of 19 vessels with an average age of 9 years, consisting of 16 Capesize, 1 Panamax, and 2 Supramax vessels.
Delivery of the vessels is expected to occur during the fourth quarter of 2017 and the first quarter of 2018.
GoodBulk will have the option to acquire up to an additional 6 Capesize vessels.
“We are excited to partner with CarVal Investors in this transaction as we continue to execute upon the company’s strategy of building an industry leading platform for investment in dry bulk vessels,” John Michael Radziwill, Chairman and CEO, said.
The transaction provides GoodBulk’s shareholders with increased Capesize exposure at “an opportune time in a recovering market,” the company said, adding that the purchase is expected to be immediately accretive to Net Asset Value per share while reducing GoodBulk’s normalized break even cost by ship ownership day and reducing the average fleet age by approximately 1.4 years.
“Furthermore, with a significant share component priced at a premium to NAV this transaction underscores the value of the GoodBulk platform,” Radziwill added.
The company’s leverage ratio of net debt to gross asset value is expected to remain below 30%.
Following completion of the transaction, funds managed by CarVal Investors will be GoodBulk’s largest shareholder.
“CarVal’s decision to partner with the company in this transaction further validates GoodBulk’s market positioning and ability to develop into a landmark dry bulk shipping platform,” Milos Brajovic, Partner of Lantern Capital Partners, said.