Golden Ocean Group Limited announced that it has entered into agreements to acquire 16 modern dry bulk vessels in an all-share transaction where the Company will issue in aggregate 17.8 million consideration shares and assume debt of USD 285.2 million (the “Acquisition”). Of the 16 vessels to be acquired, 14 will be acquired from subsidiaries of Quintana Shipping Ltd. (“Quintana”), and two ice class Panamax vessels will be acquired from subsidiaries of Seatankers, an affiliate of Hemen Holding Ltd. (“Hemen”), the Company’s largest shareholder. The Acquisition will add significant scale to Golden Ocean’s operating fleet and contribute to reducing cash breakeven levels. Based on the closing price of the Golden Ocean share on the Oslo Stock Exchange on March 14, 2017 of NOK 61.50, equal to USD 7.14 per share at a USD/NOK exchange rate of 8.6078, the aggregate transaction value is approximately USD 412.4 million.

Birgitte Ringstad Vartdal, CEO of Golden Ocean Management AS, commented:

 

 

“We are proud to be in the position to acquire a large number of modern, high quality vessels in an all-share transaction. This underscores the value the sellers ascribe to our operating platform, management team and corporate strategy. The acquired vessels, averaging 4 years of age, which matches the age profile of our existing fleet, will further enhance our already significant commercial scale and increase our operational leverage to a potential dry bulk market recovery. Combined with attractive bank financing which includes no fixed debt amortization and soft covenants through June 2019, the transaction should be accretive also in terms of cash breakeven levels. We consider the price obtained to be attractive and expect the transaction to be significantly value-accretive to our shareholders.”

 

 

As part of the Acquisition, Golden Ocean will acquire Quintana’s 14 vessel fleet and assume the fleet’s corresponding debt of USD 262.7 million in consideration for 14.5 million shares of Golden Ocean. Golden Ocean has agreed to a USD 17.4 million down payment of the debt associated with the fleet in order to obtain no fixed debt repayments and soft covenants through June 2019. A cash sweep mechanism will be in place for excess cash generated by the fleet. The fleet consists of 6 Capesize vessels and 8 Kamsarmax/Panamax vessels, mainly built in Japan and Korea. The vessels will be owned by a non-recourse subsidiary to Golden Ocean.

Additionally, Golden Ocean will acquire two 2017-built ice class Panamax vessels from affiliates of Hemen in consideration for 3.3 million shares of the Company to fund the equity portion of the acquisition. Hemen will issue a seller credit of USD 22.5 million that matures in June 2019, with no fixed amortization. These vessels will also be owned by a non-recourse subsidiary of Golden Ocean.

Completion of the Acquisition is subject to the execution of definitive loan documents, Golden Ocean raising sufficient new equity to satisfy certain loan conditions, customary closing conditions and regulatory approvals. Closing is expected to be during the second quarter of 2017 and on a vessel-by-vessel basis.

DNB Markets is acting as financial advisor to the Company in connection with the Acquisition.

Announcement of commencement of USD 60 million equity offering

Golden Ocean Group Limited announced that it has commenced an equity offering (the “Offering”) for issue of new shares (the “New Shares”) for gross proceeds of the NOK equivalent of approximately USD 60 million. The Company has engaged DNB Markets Inc. and ABN AMRO Securities (USA) LLC (the “Managers”) as placement agents in connection with the Offering.

The Offering will be directed towards certain Norwegian and international institutional investors subject to applicable exemptions from European prospectus requirements. The minimum application and allocation amount has been set to the NOK equivalent of EUR100,000, provided that the Company reserves the right to, at its sole discretion, allocate lower amounts to investors that qualify as “professional investors” pursuant to the Norwegian Securities Trading Act and ancillary regulations.

We intend to use the net proceeds of this offering to partially pre-pay debt under the new loan agreements we expect to enter into in connection with the acquisition of fourteen vessels from Quintana Shipping Ltd., as previously announced, in an amount of approximately $17.4 million, and to use the balance for general corporate purposes in subsidiaries non-recourse to the Company.

The subscription price and number of shares issued in the Offering will be determined through an accelerated bookbuilding process. The bookbuilding period will start March 14, 2017 at 4:00 pm EST and 21:00 pm CET and are expected to end at March 15, 2017 at 3:00 am EST and 08:00 am CET. The Company reserves the right to close or extend the bookbuilding period at any time in its sole discretion, at short notice.

The Managers have prior to the launch of the Offering received significant indications of interest from investors to subscribe in the Offering for an amount well exceeding the transaction size of USD 60 million.

The allocation of New Shares in the Offering will be made at the discretion of the Company in consultation with the Managers, on or about March 15, 2017, subject to any shortening or extension of the application period.

Subject to full payment of the New Shares, the New Shares allocated in the Offering are expected to be delivered to the subscribers in the Offering on or about March 17, 2017 and to be registered in the Norwegian Central Securities Depository (VPS) with the Company’s ISIN BMG396372051 and commence to trade under the Company’s ordinary trading symbol “GOGL” and become tradable on the Oslo Stock Exchange and the NASDAQ on or about March 17, 2017.

Source: Golden Ocean