Scorpio Bulkers Buying GOGL’s Six Ultramaxes

Norway-based dry bulk shipping company Golden Ocean Group Limited (GOGL) has entered into agreements to sell six Ultramax vessels to Scorpio Bulkers.

The ships, built at Chengxi Shipyard between 2015 and 2017, would be sold en bloc for USD 142.5 million. Scorpio informed that it would fund the purchase by cash on hand, as well as existing and new debt facilities which are currently under discussion with lenders.

All of the Ultramax vessels were built in China, three of which were handed over to GOGL in 2015, one was delivered in 2016, and two were delivered in 2017. The ships are expected to be delivered to their new owner during the fourth quarter of 2017.

GOGL said that the net cash proceeds from the sale after the repayment of USD 39.2 million of associated debt will be slightly in excess of USD 100 million.

Separately, the company informed that it has agreed to take early delivery of the Golden Nimbus, a Capesize vessel under construction at New Times Shipbuilding.

Golden Ocean will make a final payment of USD 29.4 million for the vessel at delivery and will draw USD 25 million from the related bank financing in early October 2017, resulting in a net cash outlay of USD 4.4 million.

Upon delivery, which is expected this month, the vessel will commence a time charter at a gross rate of USD 16,750 per day for a duration of between 14 and 18 months.

Including this charter, the company has taken advantage of recent market strength to fix five of the 44 Capesize vessels in its 2018 operating fleet on charters of one year.

“The sale of these vessels strengthens our commercial focus on Capesize and Panamax vessels, where we have critical mass and that we believe will provide the greatest leverage to a recovery in the dry bulk shipping market,” Birgitte Ringstad Vartdal, CEO of Golden Ocean Management AS, said.

“It also increases our financial flexibility considerably as the majority of the gross proceeds will directly increase our cash balance. We are also pleased to be in the position to take early delivery of one of our Capesize newbuildings after having secured employment for the vessel at a rate well above our cash break even levels,” Vartdal added.