GOGL splashes $752 million on 18 bulkers in fleet renewal push

Golden Ocean Group Limited has acquired 18 scrubber-fitted dry bulk vessels for a total of $752 million from affiliates of Hemen Holding Limited, a company indirectly controlled by John Fredriksen, the company’s largest shareholder.

Illustration; Image credit GOGL

The batch consists of 10 Newcastlemaxes built in 2019-21 and 8 Kamsarmaxes built in 2020-21, GOGL said, adding that the move was in line with the company’s fleet renewal strategy.

The transaction is being financed through a private placement completed yesterday which has raised $338 million and a loan facility worth $414 million from Hemen’s affiliates.

“Our recently-announced acquisition of 18 large, modern dry bulk vessels significantly increases our exposure to positive market dynamics while also reducing cash break even levels across our fleet.  With a best-in-class fleet focused exclusively on large vessel classes, limited capital expenditure commitments and no debt maturities until 2023, Golden Ocean is very well positioned to generate significant cash flow and create value for our shareholders,” Ulrik Andersen, Chief Executive Officer, commented.

The company reported a net income of $25.4 million for the fourth quarter of 2020 compared with $39.1 million for the third quarter of 2020.

Adjusted EBITDA for Q4 stood at $59.3 million, compared with $76.7 million for the third quarter of 2020.

Net loss for the year ended December 31, 2020 was $137.7 million compared with a net income of $37.2 million in 2019.

This increase in loss was primarily driven by lower rates in the period, an increase in offhire days and impairment charges of $95.0 million

“The company continued to deliver a strong performance in the fourth quarter of 2020, despite volatility in freight rates. Thus far the first quarter in 2021 has been the strongest in recent years, which suggests a tight supply and demand balance in the market and bodes well for the balance of the year,” Andersen said.

“We expect positive impacts from seasonality as well as a broader rebound in freight demand as the pandemic softens its grip on the global economy.”