approximately 33% funded by new shares issued to ship sellers
Hong Kong - 17 September 2019
Pacific Basin Shipping Limited (“Pacific Basin” or the “Company”, 2343.HK), one of the world’s leading dry bulk shipping companies, today announced its conditional agreement to acquire four dry bulk vessels for a total consideration of US$73.84 million to be 33% funded by equity.
The consideration will take the form of: 1) 105,912,033 new Pacific Basin shares (the “newshares”) to be issued to the ships’ sellers amounting to US$24.37 million in aggregate; and 2) US$49.47million to be funded from the Group’s cash.
The acquisition of the ships and the share issue are all conditional upon the Hong Kong Stock Exchange’s approval of the listing of the newshares, which we expect to be granted within several days.
The acquisitions relate to
The issue price of HK$1.80per new share issued to the ships’ sellers represents a premium of 5.94% to the average closing price for the last ten trading days immediately prior to the date of the ship acquisition contracts.
Mr. Mats Berglund, CEO of Pacific Basin, said: “Consistent with our previously stated goal of looking opportunistically but cautiously at acquiring good quality secondhand ships, these ship purchases represent another attractive opportunityto grow and renew our fleet with modern, efficient vessels built by large, reputable shipbuilders Shikoku, Tsuneishi and Imabari.
The Handysize ships are logs-fitted, and all the shipsare ofexcellentdesign for our trades and will enhance our fleet for the long term.
They will also increase further the proportion of our owned versus chartered-in vessels atwhat we consider to be an attractive time.
The three 2015-built ships are currently under our long-term time charterwith one expiring in October 2019 and two expiring in 2022, so our purchase of these vessels will replace our charter costswith significantly lower owned vesselcash costs.
The share issue enablesimmediate 33% equity-based funding of the acquisitions of the four ships and will enhance our operating cash flow, EBITDA and competitive strength.
The transactions will also lower our P&L breakeven levelsand are expected to be accretive to our earnings per share.
We appreciate our relationships with the sellers and their belief in the longer term prospects for Pacific Basin and its shareholder value. We are delighted to have secured these excellent ships.”
About Pacific Basin
Pacific Basin Shipping Limited (www.pacificbasin.com) is one of the world’s leading owners and operators of modern Handysize and Supramax dry bulk vessels.
The Company currently owns 115 dry bulk ships. Including chartered ships, we operated an average of230 Handysize and Supramax ships overall during the first half of 2019.
Pacific Basin is listed and headquartered in Hong Kong and provides a quality service to over 500 customers, with approximately 3,800 seafarers and over 330 shore-based staff in 12 offices in key locations around the world.
Pacific Basin Shipping Limited press release.