The six capesizes, 14 kamsarmaxes, 12 panamaxes and two handymaxes from Excel Maritime are being acquired for 29.917m shares in Nasdaq-listed Star Bulk and $288.39m in cash.
Excel Maritime, which emerged from Chapter 11 bankruptcy proceedings earlier this year, is majority-owned by US private equity firm Oaktree Capital and Angelo Gordon & Co, while Star Bulk is also majority owned by Oaktree under its recent deal to merge with Oceanbulk.
Star Bulk said it expects to use cash on hand combined with a $231m bridging loan facility secured with affiliates of Oaktree and Angelo Gordon to pay the cash portion of transaction.
Following a series of closings on the transactions for the vessels, which are expected to take until the end of 2014, Oaktree investors would own 57.3% of Star Bulk’s common stock and Angelo Gordon investors 7.8%. The deal values the 34 vessels at $634.91m.
Following the deal Star Bulk will have a fleet of 103 bulk vessels with a capacity of 11.85m dwt. Star Bulk said the deal had been approved by the “disinterested” members of its board of directors.
“These transactions mark an important next step in the evolution of Star Bulk following our recent merger transaction with Oceanbulk. We believe that these vessel purchases are accretive to earnings and cash flow per share,” said Petro Pappas, ceo of Star Bulk.
“As with our recent merger transaction with Oceanbulk, these transactions will preserve our cash resources, as it will be funded primarily with new equity determined on a net asset value to net asset value basis and a bridge loan from Oaktree and Angelo Gordon,” he added.
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