2020 Bulkers Ltd have announced that it has signed an agreement to sell its 2019 built Newcastlemax vessels Bulk Shanghai and Bulk Seoul to an unaffiliated third party for a total consideration of US$127.5 million. The sale is subject to certain closing conditions, in line with industry standards.
The two vessels are currently owned by Ocean Yield under a sale leaseback arrangement, and the Company has exercised its option with Ocean Yield to effectuate the sale.
The Company will retain the vessels’ operating cashflow until closing of the transaction, which is expected to take place no later than May 1, 2024. Assuming the two vessels each perform two more China-Australia round voyages, based on the current FFA curve, cash flow during the period is estimated to be approximately US$3.5 million.
The Company expects to recognize a net book gain of approximately US$40 million upon completion of the transaction.
As a result of the transaction, the Company’s estimated cash breakeven will be reduced with US$1,900 per day to US$14,500 per day and the Company’s average gross debt per vessel will decrease from approximately US$25.7 million to approximately US$23.7 million.
The Board of Directors of the Company will, subject to completion of the sale, determine the allocation of the net proceeds from the transaction, which may include further debt repayments or a return of capital to shareholders.