Golden Ocean rises $110m in share offering
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Bermuda-registered, John Fredriksen-linked bulk carrier company Golden Ocean Group has issued 180m new ordinary shares at NKr 4.1 per share, raising US$110m in new equity. The company's largest shareholder, John Fredriksen-controlled Hemen Holding, underwrote the placement and bought 72m shares. Hemen's ownership interest remains basically unchanged after the issue at 40%. The move was part of major restructuring of the company which has been hit by the severe downturn in the dry bulk markets.
A statement says: “The equity infusion combined with various agreements reached with yards and lenders to the Company, the existing book of long term charter out agreement and the modern fleet will create a solid financial fundament for future operation of Golden Ocean. The restructured balance sheet of GOGL should also put the Company in a position where it can benefit from new opportunities in the dry-bulk market in the short to medium term.” The Company has agreed with Hemen Holding to buy back Hemen Holding's $165m position in the convertible bond at a price of 35 % of par. However the company notes: “Similar offers have been given to four other significant remaining holders, but they have rejected this price. The buy back of the bonds will reduce the Company's debt with $155m and create a positive income of $96 million in Q2 2009.” The statement continues: “As a precondition to the placement of the new shares, the company has succeeded in restructuring its order book with its shipyards. This restructuring involves a total of 9 vessels on order. The restructuring includes postponements of delivery dates, cancellations and the transfer of a number of vessels into a single purpose company which can be project financed. The consequence of the restructuring is that the financial commitment under the Company's new building program is reduced by a total of approximately $350m.” Golden Ocean has also reached agreements with its lenders to alter the terms under its various syndicated loan agreements, allowing it to draw on existing facilities.
The company says: “Save for 3 kamsarmax newbuildings, all of which have 10 years time charters attached and 1 capesize vessel to be delivered in 2012, the entire newbuilding program of the company now has secured required external financing. Golden Ocean's open Capesize capacity for 2009/2010 is, on average, just in excess of 10%. For the Panamax segment, the open capacity is 40%.” It adds: “It has been the Board's target for the restructuring that the Company with its current charter coverage should be in position to generate positive cashflow after debt service and payment of newbuildings even if the average spot market rates for both segments should be as low as $15,000 and $7,500 per day which are lower than indicated through current forward market. Under improved scenarios the company will generate substantial free cash.”
A statement says: “The equity infusion combined with various agreements reached with yards and lenders to the Company, the existing book of long term charter out agreement and the modern fleet will create a solid financial fundament for future operation of Golden Ocean. The restructured balance sheet of GOGL should also put the Company in a position where it can benefit from new opportunities in the dry-bulk market in the short to medium term.” The Company has agreed with Hemen Holding to buy back Hemen Holding's $165m position in the convertible bond at a price of 35 % of par. However the company notes: “Similar offers have been given to four other significant remaining holders, but they have rejected this price. The buy back of the bonds will reduce the Company's debt with $155m and create a positive income of $96 million in Q2 2009.” The statement continues: “As a precondition to the placement of the new shares, the company has succeeded in restructuring its order book with its shipyards. This restructuring involves a total of 9 vessels on order. The restructuring includes postponements of delivery dates, cancellations and the transfer of a number of vessels into a single purpose company which can be project financed. The consequence of the restructuring is that the financial commitment under the Company's new building program is reduced by a total of approximately $350m.” Golden Ocean has also reached agreements with its lenders to alter the terms under its various syndicated loan agreements, allowing it to draw on existing facilities.
The company says: “Save for 3 kamsarmax newbuildings, all of which have 10 years time charters attached and 1 capesize vessel to be delivered in 2012, the entire newbuilding program of the company now has secured required external financing. Golden Ocean's open Capesize capacity for 2009/2010 is, on average, just in excess of 10%. For the Panamax segment, the open capacity is 40%.” It adds: “It has been the Board's target for the restructuring that the Company with its current charter coverage should be in position to generate positive cashflow after debt service and payment of newbuildings even if the average spot market rates for both segments should be as low as $15,000 and $7,500 per day which are lower than indicated through current forward market. Under improved scenarios the company will generate substantial free cash.”