Golden Ocean Reduces Red Ink, Completes Acquisition of 16 Dry Bulk Vessels

Photo: Golden Ocean Group

Dry bulk shipping company Golden Ocean has completed its acquisition of 16 modern dry bulk vessels as part of ship-for-share transactions announced earlier this year, the company said in its second quarter report released Thursday.

Golden Ocean reported a net loss of $12 million in the second quarter of 2017, an improvement compared to the company’s $39.2 million loss in the second quarter of 2016 and its $17.9 million net loss in the first quarter of 2017.

Adjusted EBITDA in the second quarter was $29.7 million, compared with adjusted EBITDA of $17.5 million in the first quarter of 2017 and negative adjusted EBITDA of $0.8 million in the second quarter of 2016, the company said.

Golden Ocean also revealed that it has completed the acquisitions of 16 modern dry bulk vessels in ship-for-share transactions in exchange for 17.8 million shares and the assumption of $285.2 million in debt. The transactions, first announced in March, have a total value at $412 million.

Of the 16 vessels, 14 were acquired from subsidiaries of Quintana Shipping, and two ice class Panamax vessels were acquired from subsidiaries of Seatankers, an affiliate of Hemen Holding, Golden Ocean’s largest shareholder. Hemen Holding is indirectly controlled by shipping magnate John Fredriksen for the benefit of his immediate family.

Fourteen of the deliveries took place in the second of 2017 and three in July 2017.

Golden Ocean has six remaining Capesize newbuildings scheduled to be delivered in 2018.

Golden Ocean’s fleet currently consists of 76 bulk carriers with an average age of about 4 years.

Birgitte Ringstad Vartdal, Chief Executive Officer of Golden Ocean Management AS commented:

“Our second quarter results were positively impacted by the improved freight rate environment going into the quarter and by a small increase in our fleet operating days. The majority of the 16 modern, high quality vessels we agreed to acquire earlier this year were delivered in the second half of the quarter. All of these vessels have now been delivered and we view the acquisition as timely based on the developments both in freight rates and asset values. Our large fleet of young, modern vessels with the majority trading in the spot market gives us strong leverage to further improvements in the dry bulk market and positions the company to create significant value for our shareholders.”