Star Bulk Carriers Corp. has inked today definitive agreements with Oaktree Capital Management, L.P. and Star Bulk’s Non‐Executive Chairman, Mr. Petros Pappas, pursuant to which Oceanbulk Shipping LLC and Oceanbulk Carriers LLC and entities controlled by the Pappas Investors are expected to become indirect wholly‐owned subsidiaries of Star Bulk.
Through the transaction, Star Bulk is acquiring an operating fleet of 15 dry bulk carrier vessels, with an average age of 5.6 years and an aggregate capacity of approximately 1.75 million dwt. The fleet includes five Capesize vessels, two post‐Panamax vessels, six Kamsarmax vessels and two Supramax vessels and contracts for the construction of 26 fuel‐efficient, eco‐design newbuilding dry bulk vessels including eight Newcastlemax vessels, eight Capesize vessels and ten Ultramax vessels each being built at shipyards in Japan and China. The newbuild vessels are scheduled to be delivered in 2014, 2015 and 2016. Upon completion of the transaction, the Oaktree Investors will own 61.3% of Star Bulk's shares of common stock and the Pappas Investors will own 12.5% of Star Bulk’s common stock. In connection with the transaction, Star Bulk has agreed to enter into shareholders agreements with the Oaktree Investors and the Pappas Investors providing for certain voting restrictions, standstill obligations and ownership limitations and, for the Oaktree Investors, certain rights to make Board nominations and to appoint officers of the company. As part of the transaction, the Oaktree Investors, the Pappas Investors and the company have agreed that Mr. Petros Pappas will become the Chief Executive Officer of the company and Mr. Spyros Capralos will become Non‐Executive Chairman of the Board. Spyros Capralos, President & CEO of Star Bulk, commented: "The transaction marks an important next step in the evolution for Star Bulk. Since 2013, Star Bulk has dramatically improved its market capitalization and liquidity through the successful completion of the rights offering and add‐on equity offering, modernized its existing fleet and placed a series of significant newbuilding orders to position the company for the future.
With this transaction the company creates the largest U.S. listed dry bulk company with a strong shareholder base. We believe that the transaction is accretive to earnings, cash flow, and net asset value, and also has additional benefits as it will dramatically increase the market capitalization and asset base, enhance the on-the-water fleet portfolio, increase the newbuilding portfolio by combining two similar newbuild strategies, and improve access to capital to fund the current and assumed capital expenditure obligations. In addition, the combined business will be well positioned to capitalize on an improving dry bulk market with significant operating leverage to rising rates." The transaction is expected to close within the next 30 days subject to customary conditions, including the affirmative vote of a majority of Star Bulk’s shareholders that are not affiliated with the Oaktree Investors or the Pappas Investors to approve the transaction at a special meeting of shareholders. Star Bulk expects to hold the Special Meeting on July 11, 2014.