Star Bulk and Oceanbulk Carriers to create new companyStaff writer ▼ | Tuesday June 17, 2014 8:34AM ET
Star Bulk Carriers Corp. has entered into definitive agreements with entities affiliated with Oaktree Capital Management, L.P. and Star Bulk's non-executive chairman Petros Pappas and certain of his immediate family members, including Milena Maria Pappas, one of Star Bulk's directors, pursuant to which Oceanbulk Shipping LLC and Oceanbulk Carriers LLC and entities controlled by the Pappas Investors are expected to become indirect wholly-owned subsidiaries of Star Bulk in consideration for the issuance to the Oaktree Investors and the Pappas Investors of 54.104 million shares of common stock of Star Bulk.
Through the Transaction, Star Bulk is acquiring an operating fleet of 15 dry bulk carrier vessels, with an average age of 5.6 years and an aggregate capacity of approximately 1.75 million dwt, including five Capesize vessels, two post-Panamax vessels, six Kamsarmax vessels and two Supramax vessels and contracts for the construction of 26 fuel-efficient, eco-design newbuilding dry bulk vessels including eight Newcastlemax vessels, eight Capesize vessels and ten Ultramax vessels each being built at shipyards in Japan and China. The newbuild vessels are scheduled to be delivered in 2014, 2015 and 2016.
Upon completion of the Transaction, the Oaktree Investors will own 61.3% of Star Bulk's shares of common stock and the Pappas Investors will own 12.5% of Star Bulk's common stock. In connection with the Transaction, the Company has agreed to enter into shareholders agreements with the Oaktree Investors and the Pappas Investors providing for certain voting restrictions, standstill obligations and ownership limitations and, for the Oaktree Investors, certain rights to make Board nominations and to appoint officers of the Company.
As part of the Transaction, the Oaktree Investors, the Pappas Investors and the Company have agreed that Petros Pappas will become the chief executive officer of the company and Spyros Capralos will become non-executive chairman of the board. ■