Greece´s dry bulk operator Star Bulk has sealed a repurchase agreement with OCM XL Holdings, Oaktree OBC Container Holdings, and OCM FIE, to purchase of an additional 10 million of its common shares at a price per common share of $19.50.
The Nasdaq-listed operator with a fleet of 119 vessels said the share repurchase was approved unanimously by all the disinterested members of the company’s board of directors.
After the sale, which should close in December after which the 10 million shares will be withdrawn and cancelled, Oaktree and its affiliated funds aggregate ownership in the company is expected to be reduced from approximately 17.2% of the company’s outstanding common stock to around 7.2%.
Furthermore, Oaktree shareholders is expected to be reduced to one director.
Petros Pappas-led company Star Bulk, also noted that the purchase price will be funded from new debt financing, which the company intends to repay with proceeds mostly from future vessel sales.
The company also reports that the “share repurchase will be accretive to its future dividends per share.”
Star Bulk currently operates a fleet portfolio of 119 vessels, with an aggregate capacity of 13.3 million dwt, consisting of 17 newcastlemax, 20 capesize, 2 mini capesize, 7 post panamax, 40 kamsarmax, 2 panamax, 20 ultramax and 11 supramax vessels, with carrying capacities between 52,425 dwt and 209,529 dwt.
Earlier this year, its chief executive Petros Pappas stated that the company continues to opportunistically renew its fleet having agreed to sell five Supramax vessels built in 2012, taking advantage of elevated vessel S&P values.
Since the beginning of the year and until August, Star Bulk have sold seven vessels and received insurance proceeds from one vessel for total proceeds net of debt repayments of $153.1 million.
