Norway-based Golden Ocean Group (GOGL) has announced plans to buy two Capesize ships from affiliates of Hemen Holding for $43m per vessel.
GOGL also aims to secure a non-amortising seller’s credit loan from an unnamed affiliate of Hemen to settle the purchase price of the vessels.
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The loan will comprise an annual London Interbank Offered Rate (LIBOR) interest of 3% and will mature three years after delivery of the vessels. It will be used to fund 50% of the deal.
The remaining amount is expected to be paid via a mix of $9m cash and around $34m of newly issued common shares in GOGL upon the delivery of the ships.
Hemen and a selection of its affiliates will continue to hold its current ownership position of roughly 34.2% in GOGL following the completion of the deal and the proposed equity offering.
In addition, GOGL plans to terminate the covenant waivers related to its recourse debt once the expected equity offering is completed.
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By GlobalDataGolden Ocean Management CEO Birgitte Ringstad Vartdal said: “This transaction is consistent with our strategy of focusing our commercial efforts on the vessel segments that we believe will provide the greatest leverage to a recovery in the dry bulk shipping market.
“Golden Ocean’s financial position has been enhanced significantly over the past 12 months. With a strong cash balance, we intend to terminate the covenant waivers related to the company’s recourse debt upon completion of the expected equity offering.
“This will reinstate the normal covenants, which the company is now in compliance with, and remove the company’s restrictions on new acquisitions, new debt and dividend payments.
“The waiver structure in the non-recourse debt related to the transactions announced in March 2017 will remain.”
The newly announced deal is subject to completion of an equity offering, entry into the seller’s credit loan and other customary closing conditions.
Both vessels are due to be delivered within four months of the fulfilment of these criteria.
