Star Bulk Carriers Corp, a global shipping company focusing on the transportation of dry bulk cargoes announced today that it has entered into an en bloc definitive agreement with entities affiliated with E.R. Capital Holding GmbH & Cie. KG, pursuant to which the Company will acquire three (3) firm operating dry bulk vessels (the “Step 1 Vessels”) within 2018 ( the “Step 1 Acquisition”), and four (4) optional operating dry bulk vessels (the “Step 2 Vessels”) in 2019 (the “Step 2 Acquisition”), and together the “Vessels”. Subject to agreeing a three party novation agreement with charterers and E.R., any charter parties existing at the time of the deliveries of each of the Vessels shall be novated to Star Bulk.
The Step 1 Vessels will be acquired for an aggregate of approximately 1.34 million common shares of Star Bulk (the “Step 1 Consideration Shares”) and $41.70 million in cash. The number of Step 1 Consideration Shares to be issued is subject to adjustments for the Company’s cash, debt and remaining capital expenditures as of one business day prior to the delivery date of each of the Step 1 Vessels. The cash portion of the consideration for Step 1 Vessels will be financed through proceeds of a new five-year term loan of $41.0 million from a major European commercial bank. Following the consummation of the Step 1 Acquisition, E.R. will own approximately 1.45% of SBLK common shares.
In relation to the Step 2 Vessels, the Sellers have granted four call options to the Company for an aggregate exercise price of $115.39 million or $28.85 million per Step 2 Vessel (the “Call Options”), exercisable on April 1st 2019. Concurrently, the Company has granted four put options to E.R. with an aggregate exercise price of $105.39 million or $26.35 million per Step 2 Vessel (the “Put Options”) exercisable by E.R. from April 2, 2019 to April 4, 2019 (inclusive), in the event that the Company does not exercise the Call Options. The aggregate exercise price of the Call and Put Options is payable in either, 2/3 cash and 1/3 common shares of Star Bulk (the “Step 2 Consideration Shares”), or 100% cash, at the option of the Company. The number of Step 2 Consideration Shares to be issued to E.R. (if any), will be determined by the net asset value of the Company, which will be based on the average vessel valuations by independent vessel appraisers as of March 31, 2019 and will be subject to adjustments for the Company’s cash, debt and remaining capital expenditures as of one business day prior to the delivery date of each of the Step 2 Vessels.