☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
Common Shares, par value $0.01 per share 8.30% Senior Notes due 2022 | SBLK SBLKZ | Nasdaq Global Select Market; Oslo Børs Nasdaq Global Select Market |
● | general dry bulk shipping market conditions, including fluctuations in charter rates and vessel values; |
● | the strength of world economies; |
● | the stability of Europe and the Euro; |
● | fluctuations in interest rates and foreign exchange rates; |
● | changes in demand in the dry bulk shipping industry, including the market for our vessels; |
● | changes in our operating expenses, including bunker prices, dry docking and insurance costs; |
● | changes in governmental rules and regulations or actions taken by regulatory authorities; |
● | potential liability from pending or future litigation; |
● | general domestic and international political conditions; |
● | potential disruption of shipping routes due to accidents or political events; |
● | business disruptions due to natural disasters or other disasters outside our control, such as the recent outbreak of COVID-19; |
● | the availability of financing and refinancing; |
● | our ability to meet requirements for additional capital and financing to grow our business; |
● | the impact of our indebtedness and the compliance with the covenants included in our debt agreements; |
● | vessel breakdowns and instances of off-hire; |
● | potential exposure or loss from investment in derivative instruments; |
● | potential conflicts of interest involving our Chief Executive Officer, his family and other members of our senior management; |
● | our ability to complete acquisition transactions as and when planned; and |
● | other important factors described in “Risk Factors.” |
Page | |||
PART I. | |||
Item 1. | 1 | ||
Item 2. | 1 | ||
Item 3. | 1 | ||
Item 4. | 36 | ||
Item 4A. | 63 | ||
Item 5. | 63 | ||
Item 6. | 91 | ||
Item 7. | 99 | ||
Item 8. | 115 | ||
Item 9. | 116 | ||
Item 10. | 116 | ||
Item 11. | 129 | ||
Item 12. | 132 | ||
PART II. | |||
Item 13. | 133 | ||
Item 14. | 133 | ||
Item 15. | 133 | ||
Item 16A. | 134 | ||
Item 16B. | 134 | ||
Item 16C. | 134 | ||
Item 16D. | 135 | ||
Item 16E. | 135 | ||
Item 16F. | 136 | ||
Item 16G. | 136 | ||
Item 16H. | 137 | ||
PART III. | |||
Item 17. | 138 | ||
Item 18. | 138 | ||
Item 19. | 138 |
1. | Newcastlemax, which are vessels with carrying capacities of between 200,000 dwt and 210,000 dwt; |
2. | Capesize, which are vessels with carrying capacities of between 100,000 dwt and 200,000 dwt; |
3. | Post Panamax, which are vessels with carrying capacities of between 90,000 dwt and 100,000 dwt; |
4. | Kamsarmax, which are vessels with carrying capacities of between 80,000 dwt and 90,000 dwt; |
5. | Panamax, which are vessels with carrying capacities of between 65,000 and 80,000 dwt; |
6. | Ultramax, which are vessels with carrying capacities of between 60,000 and 65,000 dwt; and |
7. | Supramax, which are vessels with carrying capacities of between 50,000 and 60,000 dwt. |
A. | Selected Consolidated Financial Data |
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
Voyage revenues | 234,035 | 221,987 | 331,976 | 651,561 | 821,365 | |||||||||||||||
Management fee income | 251 | 119 | — | — | — | |||||||||||||||
234,286 | 222,106 | 331,976 | 651,561 | 821,365 | ||||||||||||||||
Voyage expenses | 72,877 | 65,821 | 64,682 | 121,596 | 222,962 | |||||||||||||||
Charter-in hire expenses | 1,025 | 3,550 | 5,325 | 92,896 | 126,813 | |||||||||||||||
Vessel operating expenses | 112,796 | 98,830 | 101,428 | 128,872 | 160,062 | |||||||||||||||
Dry docking expenses | 14,950 | 6,023 | 4,262 | 8,970 | 57,444 | |||||||||||||||
Depreciation | 82,070 | 81,935 | 82,623 | 102,852 | 124,280 | |||||||||||||||
Management fees | 8,436 | 7,604 | 7,543 | 11,321 | 17,500 | |||||||||||||||
General and administrative expenses | 23,621 | 24,602 | 30,955 | 33,972 | 34,819 | |||||||||||||||
Provision for doubtful debts | — | — | — | 722 | 1,607 | |||||||||||||||
(Gain)/ Loss on forward freight agreements and bunker swaps | — | (411 | ) | 841 | 447 | (4,411 | ) | |||||||||||||
Impairment loss | 321,978 | 29,221 | — | 17,784 | 3,411 | |||||||||||||||
Loss on time charter agreement termination | 2,114 | — | — | — | — | |||||||||||||||
Other operational loss | — | 503 | 989 | 191 | 110 | |||||||||||||||
Other operational gain | (592 | ) | (1,565 | ) | (2,918 | ) | — | (2,423 | ) | |||||||||||
(Gain) / Loss on sale of vessels | 20,585 | 15,248 | (2,598 | ) | — | 5,493 | ||||||||||||||
659,860 | 331,361 | 293,132 | 519,623 | 747,667 | ||||||||||||||||
Operating income / (loss) | (425,574 | ) | (109,255 | ) | 38,844 | 131,938 | 73,698 | |||||||||||||
Interest and finance costs | (29,661 | ) | (41,217 | ) | (50,458 | ) | (73,715 | ) | (87,617 | ) | ||||||||||
Interest and other income / (loss) | 1,090 | 876 | 2,997 | 1,866 | 1,299 | |||||||||||||||
Gain / (loss) on derivative financial instruments, net | (3,268 | ) | (2,116 | ) | 246 | 707 | — | |||||||||||||
Loss on debt extinguishment | (974 | ) | (2,375 | ) | (1,257 | ) | (2,383 | ) | (3,526 | ) | ||||||||||
Total other expenses, net | (32,813 | ) | (44,832 | ) | (48,472 | ) | (73,525 | ) | (89,844 | ) | ||||||||||
Income/ (Loss) before taxes and equity in income of investee | (458,387 | ) | (154,087 | ) | (9,628 | ) | 58,413 | (16,146 | ) | |||||||||||
Income taxes | — | (267 | ) | (236 | ) | (61 | ) | (109 | ) | |||||||||||
Income / (Loss) before equity income of investee | (458,387 | ) | (154,354 | ) | (9,864 | ) | 58,352 | (16,255 | ) | |||||||||||
Equity in income of investee | 210 | 126 | 93 | 45 | 54 | |||||||||||||||
Net income / (loss) | (458,177 | ) | (154,228 | ) | (9,771 | ) | 58,397 | (16,201 | ) | |||||||||||
Earnings / (loss) per share, basic and diluted | (11.71 | ) | (3.24 | ) | (0.16 | ) | 0.76 | (0.17 | ) | |||||||||||
Weighted average number of shares outstanding, basic | 39,124,673 | 47,574,454 | 63,034,394 | 77,061,227 | 93,735,549 | |||||||||||||||
Weighted average number of shares outstanding, diluted | 39,124,673 | 47,574,454 | 63,034,394 | 77,326,111 | 93,735,549 |
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
Cash and cash equivalents | 208,056 | 181,758 | 257,911 | 204,921 | 117,819 | |||||||||||||||
Current Assets | 252,058 | 228,466 | 312,626 | 298,836 | 266,042 | |||||||||||||||
Advances for vessels under construction and acquisition of vessels | 127,910 | 64,570 | 48,574 | 59,900 | — | |||||||||||||||
Vessels and other fixed assets, net | 1,757,552 | 1,707,209 | 1,775,081 | 2,656,108 | 2,965,527 | |||||||||||||||
Total assets | 2,148,846 | 2,011,702 | 2,145,764 | 3,022,137 | 3,238,235 | |||||||||||||||
Current liabilities (including current portion of long-term debt and short term lease financing) | 166,949 | 28,119 | 219,274 | 222,717 | 310,931 | |||||||||||||||
Total long-term debt including long term lease financing, excluding current portion, net of unamortized debt issuance costs | 795,267 | 896,332 | 789,878 | 1,226,744 | 1,330,420 | |||||||||||||||
8.00% 2019 Notes and 8.30% 2022 Notes, net of unamortized debt issuance costs | 48,323 | 48,757 | 48,000 | 48,410 | 48,821 | |||||||||||||||
Common shares | 438 | 566 | 642 | 926 | 961 | |||||||||||||||
Total Shareholders’ equity | 1,135,358 | 1,037,230 | 1,088,052 | 1,520,045 | 1,544,040 | |||||||||||||||
Total liabilities and shareholders’ equity | 2,148,846 | 2,011,702 | 2,145,764 | 3,022,137 | 3,238,235 | |||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||
Dividends declared and paid ($0.05 per share in 2019) | — | — | — | — | 4,804 | |||||||||||||||
Net cash provided by/(used in) operating activities | (14,578 | ) | (33,232 | ) | 82,804 | 169,009 | 88,525 | |||||||||||||
Net cash provided by/(used in) investing activities | (397,508 | ) | (13,425 | ) | (127,101 | ) | (325,327 | ) | (279,837 | ) | ||||||||||
Net cash provided by/(used in) financing activities | 534,167 | 20,366 | 122,035 | 96,695 | 103,697 | |||||||||||||||
FLEET DATA | ||||||||||||||||||||
Average number of vessels (1) | 69.1 | 69.8 | 69.6 | 87.7 | 112.1 | |||||||||||||||
Total ownership days for fleet (2) | 25,206 | 25,534 | 25,387 | 32,001 | 40,915 | |||||||||||||||
Total available days for fleet (3) | 24,096 | 24,623 | 25,272 | 31,614 | 36,403 | |||||||||||||||
Charter-in days for fleet (4) | 108 | 366 | 428 | 5,089 | 6,843 | |||||||||||||||
AVERAGE DAILY RESULTS (In U.S. Dollars) | ||||||||||||||||||||
Time charter equivalent (5) | 7,042 | 6,223 | 10,366 | 13,796 | 13,027 | |||||||||||||||
Vessel operating expenses (6) | 4,475 | 3,871 | 3,995 | 4,027 | 3,912 |
(1) | Average number of vessels is the number of vessels that constituted our owned fleet for the relevant period, as measured by the sum of the number of days each operating vessel was a part of our owned fleet during the period divided by the number of calendar days in that period. |
(2) | Ownership days are the total calendar days each vessel in the fleet was owned by us for the relevant period, including vessels subject to sale and leaseback transactions and finance leases. |
(3) | Available days for the fleet are the Ownership days after subtracting off-hire days for major repairs, dry docking or special or intermediate surveys and scrubber installation. |
(4) | Charter-in days are the total days that we charter-in third-party vessels. |
(5) | Time charter equivalent rate (the “TCE rate”) represents the weighted average daily time charter equivalent rates of our operating fleet (including owned fleet and fleet under charter‐in arrangements). TCE rate is a measure of the average daily net revenue performance of our vessels. Our method of calculating TCE rate is determined by dividing voyage revenues (net of voyage expenses, charter‐in hire expense, amortization of fair value of above/below-market acquired time charter agreements and provision for onerous contracts, if any, as well as adjusted for the impact of realized gain/(loss) on forward freight agreements (“FFAs”) and bunker swaps) by Available days for the relevant time period. Available days do not include the Charter-in days as per the relevant definitions provided above. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. Starting in fiscal year 2019, we include the realized gain/(loss) on FFAs and bunker swaps in the calculation of the TCE Revenues. The change has been applied retrospectively for all periods presented. TCE rate is a standard shipping industry performance measure used primarily to compare period‐to‐period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., voyage charters, time charters, bareboat charters and pool arrangements) under which its vessels may be employed between the periods. Our method of computing TCE rate may not necessarily be comparable to TCE rates of other companies due to differences in methods of calculation. The above reported TCE rates for the year ended December 31, 2017 were calculated excluding Star Logistics. We have excluded the revenues and expenses of Star Logistics because it was formed in October 2017, and its revenues and expenses had not yet normalized in that period, which obscure material trends of our TCE rates. As a result, we believe it is more informative to our investors to present the TCE rates excluding the revenues and expenses of Star Logistics for that period (December 31, 2017). The revenues and expenses of Star Logistics normalized in the years ended December 31, 2018 and 2019 and are included for purposes of calculating the TCE rate. We include TCE rate, a non‐GAAP measure, as it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, and it assists our management in making decisions regarding the deployment and use of our operating vessels and assists investors and our management in evaluating our financial performance. For further information concerning our calculation and reconciliation of TCE revenues and TCE rate to Voyage Revenues, please see “Item 5. Operating and Financial Review and Prospects - A. Operating Results.” |
(6) | Average daily operating expenses per vessel are calculated by dividing vessel operating expenses by Ownership days. |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk factors |
● | supply of and demand for energy resources, commodities, consumer and industrial products; |
● | changes in the exploration or production of energy resources, commodities, consumer and industrial products; |
● | the location of regional and global exploration, production and manufacturing facilities; |
● | the location of consuming regions for energy resources, commodities, consumer and industrial products; |
● | the globalization of production and manufacturing; |
● | global and regional economic and political conditions, including armed conflicts and terrorist activities; |
● | natural disasters and weather; |
● | pandemics, such as the outbreak of coronavirus in China in 2020; |
● | embargoes and strikes; |
● | disruptions and developments in international trade, including trade disputes or the imposition of tariffs on various commodities or finished goods; |
● | changes in seaborne and other transportation patterns, including the distance cargo is transported by sea; |
● | environmental and other legal regulatory developments; and |
● | currency exchange rates. |
● | the number of newbuilding orders and deliveries including slippage in deliveries; |
● | number of shipyards and ability of shipyards to deliver vessels; |
● | port and canal congestion; |
● | the scrapping rate of vessels; |
● | speed of vessel operation; |
● | vessel casualties; |
● | the number of vessels that are out of service, namely those that are laid-up, dry docked, awaiting repairs or otherwise not available for hire; |
● | availability of financing for new vessels; |
● | changes in national or international regulations that may effectively cause reductions in the carrying capacity of vessels or early obsolescence of tonnage; and |
● | changes in environmental and other regulations that may limit the useful lives of vessels. |
● | low charter rates, particularly for vessels employed on short-term time charters or in the spot market; |
● | decreases in the market value of dry bulk vessels and limited secondhand market for the sale of vessels; |
● | limited financing for vessels; |
● | widespread loan covenant defaults; and |
● | declaration of bankruptcy by certain vessel operators, vessel owners, shipyards and charterers. |
● | prevailing level of charter rates; |
● | general economic and market conditions affecting the shipping industry; |
● | types, sizes and ages of vessels; |
● | supply of and demand for vessels; |
● | other modes of transportation; |
● | distressed asset sales, including newbuilding contract sales below acquisition costs due to lack of financing |
● | cost of newbuildings; |
● | governmental or other regulations; |
● | the need to upgrade vessels as a result of charterer requirements, technological advances in vessel design or equipment or otherwise; |
● | changes in environmental and other regulations that may limit the useful life of vessels; |
● | technological advances; and |
● | competition from other shipping companies and other modes of transportation. |
● | pay dividends if there is an event of default under our credit facilities; |
● | incur additional indebtedness, including the issuance of guarantees, or refinance or prepay any indebtedness, unless certain conditions exist; |
● | create liens on our assets, unless otherwise permitted under our credit facilities; |
● | change the flag, class or management of our vessels or terminate or materially amend the management agreement relating to each vessel; |
● | acquire new or sell vessels, unless certain conditions exist; |
● | merge or consolidate with, or transfer all, or substantially all, our assets to another person; or |
● | enter into a new line of business. |
● | a minimum percentage of aggregate vessel value to secured loans (security cover ratio or “SCR”); |
● | a maximum ratio of total liabilities to market value adjusted total assets; |
● | a minimum EBITDA to interest coverage ratio; |
● | a minimum liquidity; and |
● | a minimum market value adjusted net worth. |
● | identify suitable dry bulk carriers, including newbuilding slots at shipyards and/or shipping companies for acquisitions at attractive prices; |
● | obtain required financing for our existing and new operations; |
● | identify businesses engaged in managing, operating or owning dry bulk carriers for acquisitions or joint ventures; |
● | integrate any acquired dry bulk carriers or businesses successfully with our existing operations, including obtaining any approvals and qualifications necessary to operate vessels that we acquire; |
● | hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet; |
● | identify additional new markets; |
● | enhance our customer base; and |
● | improve our operating, financial and accounting systems and controls. |
● | the possibility that we may not receive a favorable return on our investment or incur losses from our investment, or the original investment may become impaired; |
● | failure to satisfy or set effective strategic objectives; |
● | our assumption of known or unknown liabilities or other unanticipated events or circumstances; |
● | the diversion of management’s attention from normal daily operations of the business; |
● | difficulties in integrating the operations, technologies, products and personnel of the acquired company or its assets; |
● | difficulties in supporting acquired operations; |
● | difficulties or delays in the transfer of vessels, equipment or personnel; |
● | failure to retain key personnel; |
● | unexpected capital equipment outlays and related expenses; |
● | insufficient revenues to offset increased expenses associated with acquisitions; |
● | under-performance problems with acquired assets or operations; |
● | issuance of common shares that could dilute our current shareholders; |
● | recording of goodwill and non-amortizable intangible assets that will be subject to periodic impairment testing and potential impairment charges against our future earnings; |
● | the opportunity cost associated with committing capital in such investments; |
● | undisclosed defects, damage, maintenance requirements or similar matters relating to acquired vessels; and |
● | becoming subject to litigation. |
● | more than a majority of our executive officers and directors are U.S. citizens or residents; |
● | more than 50% of our assets are located in the U.S.; or |
● | our business is administered principally in the U.S. |
● | actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry; |
● | mergers and strategic alliances in the dry bulk shipping industry; |
● | market conditions in the dry bulk shipping industry; |
● | changes in market valuations of companies in our industry; |
● | changes in government regulation; |
● | the failure of securities analysts to publish research about us, or shortfalls in our operating results from levels forecast by securities analysts; |
● | announcements concerning us or our competitors; and |
● | the general state of the securities markets. |
● | authorizing our board of directors to issue “blank check” preferred stock without shareholder approval; |
● | providing for a classified board of directors with staggered, three-year terms; |
● | establishing certain advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings; |
● | prohibiting cumulative voting in the election of directors; |
● | limiting the persons who may call special meetings of shareholders; |
● | authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of a majority of our outstanding common shares entitled to vote for the directors; and |
● | establishing supermajority voting provisions with respect to amendments to certain provisions of our Articles of Incorporation and our Bylaws. |
A. | History and Development of the Company |
B. | Business Overview |
Wholly Owned Subsidiaries | Vessel Name | DWT | Date Delivered to Star Bulk | Year Built | |
1 | Sea Diamond Shipping LLC | Goliath | 209,537 | July 15, 2015 | 2015 |
2 | Pearl Shiptrade LLC | Gargantua | 209,529 | April 2, 2015 | 2015 |
3 | Star Ennea LLC | Star Poseidon | 209,475 | February 26, 2016 | 2016 |
4 | Coral Cape Shipping LLC | Maharaj | 209,472 | July 15, 2015 | 2015 |
5 | Star Castle II LLC | Star Leo (1) | 207,939 | May 14, 2018 | 2018 |
6 | ABY Eleven Ltd | Star Laetitia | 207,896 | August 3, 2018 | 2017 |
7 | Domus Shipping LLC | Star Ariadne | 207,812 | March 28, 2017 | 2017 |
8 | Star Breezer LLC | Star Virgo | 207,810 | March 1, 2017 | 2017 |
9 | Star Seeker LLC | Star Libra (1) | 207,765 | June 6, 2016 | 2016 |
10 | ABY Nine Ltd | Star Sienna | 207,721 | August 3, 2018 | 2017 |
11 | Clearwater Shipping LLC | Star Marisa | 207,709 | March 11 2016 | 2016 |
12 | ABY Ten Ltd | Star Karlie | 207,566 | August 3, 2018 | 2016 |
13 | Star Castle I LLC | Star Eleni (1) | 207,555 | January 3, 2018 | 2018 |
14 | Festive Shipping LLC | Star Magnanimus | 207,490 | March 26, 2018 | 2018 |
15 | New Era II Shipping LLC | Debbie H | 206,861 | May 28, 2019 | 2019 |
16 | New Era III Shipping LLC | Star Ayesha | 206,852 | July 15, 2019 | 2019 |
(1) | Subject to a bareboat charter with purchase obligation at the expiration of the bareboat charter term. |
Wholly Owned Subsidiaries | Vessel Name | DWT | Date Delivered to Star Bulk | Year Built | |
17 | New Era I Shipping LLC | Katie K | 206,839 | April 16, 2019 | 2019 |
18 | Cape Ocean Maritime LLC | Leviathan | 182,511 | September 19, 2014 | 2014 |
19 | Cape Horizon Shipping LLC | Peloreus | 182,496 | July 22, 2014 | 2014 |
20 | Star Nor I LLC | Star Claudine (1) | 181,258 | July 6, 2018 | 2011 |
21 | Star Nor II LLC | Star Ophelia (1) | 180,716 | July 6, 2018 | 2010 |
22 | Christine Shipco LLC | Star Martha | 180,274 | October 31, 2014 | 2010 |
23 | Sandra Shipco LLC | Star Pauline | 180,233 | December 29, 2014 | 2008 |
24 | Pacific Cape Shipping LLC | Pantagruel | 180,181 | July 11, 2014 | 2004 |
25 | Star Borealis LLC | Star Borealis | 179,678 | September 9, 2011 | 2011 |
26 | Star Polaris LLC | Star Polaris | 179,546 | November 14, 2011 | 2011 |
27 | Star Nor III LLC | Star Lyra (1) | 179,147 | July 6, 2018 | 2009 |
28 | Star Regg II LLC | Star Janni | 178,978 | January 7, 2019 | 2010 |
29 | Star Regg I LLC | Star Marianne | 178,906 | January 14, 2019 | 2010 |
30 | Star Trident V LLC | Star Angie | 177,931 | October 29, 2014 | 2007 |
31 | Sky Cape Shipping LLC | Big Fish | 177,662 | July 11, 2014 | 2004 |
32 | Global Cape Shipping LLC | Kymopolia | 176,990 | July 11, 2014 | 2006 |
33 | Star Trident XXV Ltd. | Star Triumph | 176,343 | December 8, 2017 | 2004 |
34 | ABY Fourteen Ltd | Star Scarlett | 175,800 | August 3, 2018 | 2014 |
35 | ABY Fifteen Ltd | Star Audrey | 175,125 | August 3, 2018 | 2011 |
36 | Sea Cape Shipping LLC | Big Bang | 174,109 | July 11, 2014 | 2007 |
37 | ABY I LLC | Star Paola | 115,259 | August 3, 2018 | 2011 |
38 | ABM One Ltd | Star Eva | 106,659 | August 3, 2018 | 2012 |
39 | Nautical Shipping LLC | Amami | 98,681 | July 11, 2014 | 2011 |
40 | Majestic Shipping LLC | Madredeus | 98,681 | July 11, 2014 | 2011 |
41 | Star Sirius LLC | Star Sirius | 98,681 | March 7, 2014 | 2011 |
42 | Star Vega LLC | Star Vega | 98,681 | February 13, 2014 | 2011 |
43 | ABY II LLC | Star Aphrodite | 92,006 | August 3, 2018 | 2011 |
44 | Augustea Bulk Carrier Ltd | Star Piera | 91,952 | August 3, 2018 | 2010 |
45 | Augustea Bulk Carrier Ltd | Star Despoina | 91,945 | August 3, 2018 | 2010 |
46 | Star Nor IV LLC | Star Electra (1) | 83,494 | July 6, 2018 | 2011 |
47 | Star Alta I LLC | Star Angelina | 82,981 | December 5, 2014 | 2006 |
48 | Star Alta II LLC | Star Gwyneth | 82,790 | December 5, 2014 | 2006 |
49 | Star Trident I LLC | Star Kamila | 82,769 | September 3, 2014 | 2005 |
50 | Star Nor VI LLC | Star Luna (1) | 82,687 | July 6, 2018 | 2008 |
51 | Star Nor V LLC | Star Bianca (1) | 82,672 | July 6, 2018 | 2008 |
52 | Grain Shipping LLC | Pendulum | 82,619 | July 11, 2014 | 2006 |
53 | Star Trident XIX LLC | Star Maria | 82,598 | November 5, 2014 | 2007 |
54 | Star Trident XII LLC | Star Markella | 82,594 | September 29, 2014 | 2007 |
55 | Star Trident IX LLC | Star Danai | 82,574 | October 21, 2014 | 2006 |
56 | ABY Seven Ltd | Star Jeanette | 82,567 | August 3, 2018 | 2014 |
57 | Star Trident XI LLC | Star Georgia | 82,298 | October 14, 2014 | 2006 |
58 | Star Trident VIII LLC | Star Sophia | 82,269 | October 31, 2014 | 2007 |
59 | Star Trident XVI LLC | Star Mariella | 82,266 | September 19, 2014 | 2006 |
60 | Star Trident XIV LLC | Star Moira | 82,257 | November 19, 2014 | 2006 |
61 | Star Trident XVIII LLC | Star Nina | 82,224 | January 5, 2015 | 2006 |
62 | Star Trident X LLC | Star Renee | 82,221 | December 18, 2014 | 2006 |
63 | Star Trident II LLC | Star Nasia | 82,220 | August 29, 2014 | 2006 |
64 | Star Trident XIII LLC | Star Laura | 82,209 | December 8, 2014 | 2006 |
65 | Star Trident XV LLC | Star Jennifer | 82,209 | April 15, 2015 | 2006 |
66 | Star Nor VIII LLC | Star Mona (1) | 82,188 | July 6, 2018 | 2012 |
67 | Star Trident XVII LLC | Star Helena | 82,187 | December 29, 2014 | 2006 |
68 | Star Nor VII LLC | Star Astrid (1) | 82,158 | July 6, 2018 | 2012 |
69 | Waterfront Two Ltd | Star Alessia | 81,944 | August 3, 2018 | 2017 |
70 | Star Nor IX LLC | Star Calypso (1) | 81,918 | July 6, 2018 | 2014 |
71 | Star Gaia LLC | Star Charis | 81,711 | March 22, 2017 | 2013 |
72 | Star Elpis LLC | Star Suzanna | 81,711 | May 15, 2017 | 2013 |
73 | Mineral Shipping LLC | Mercurial Virgo | 81,545 | July 11, 2014 | 2013 |
74 | Star Nor X LLC | Stardust (1) | 81,502 | July 6, 2018 | 2011 |
(1) | Subject to a bareboat charter with purchase obligation at the expiration of the bareboat charter term. |
Wholly Owned Subsidiaries | Vessel Name | DWT | Date Delivered to Star Bulk | Year Built | |
75 | Star Nor XI LLC | Star Sky (1) | 81,466 | July 6, 2018 | 2010 |
76 | ABY III LLC | Star Lydia | 81,187 | August 3, 2018 | 2013 |
77 | ABY IV LLC | Star Nicole | 81,120 | August 3, 2018 | 2013 |
78 | ABY Three Ltd | Star Virginia | 81,061 | August 3, 2018 | 2015 |
79 | Star Nor XII LLC | Star Genesis (1) | 80,705 | July 6, 2018 | 2010 |
80 | Star Nor XIII LLC | Star Flame (1) | 80,448 | July 6, 2018 | 2011 |
81 | Star Trident III LLC | Star Iris | 76,466 | September 8, 2014 | 2004 |
82 | Star Trident XX LLC | Star Emily | 76,417 | September 16, 2014 | 2004 |
83 | Orion Maritime LLC | Idee Fixe (1) | 63,458 | March 25, 2015 | 2015 |
84 | Primavera Shipping LLC | Roberta (1) | 63,426 | March 31, 2015 | 2015 |
85 | Success Maritime LLC | Laura (1) | 63,399 | April 7, 2015 | 2015 |
86 | Ultra Shipping LLC | Kaley (1) | 63,283 | June 26, 2015 | 2015 |
87 | Blooming Navigation LLC | Kennadi | 63,262 | January 8, 2016 | 2016 |
88 | Jasmine Shipping LLC | Mackenzie | 63,226 | March 2, 2016 | 2016 |
89 | STAR LIDA I SHIPPING LLC | Apus (1) | 63,123 | July 16, 2019 | 2014 |
90 | Star Nor XV LLC | Star Wave (1) | 61,491 | July 6, 2018 | 2017 |
91 | Star Challenger I LLC | Star Challenger(1) | 61,462 | December 12, 2013 | 2012 |
92 | Star Challenger II LLC | Star Fighter (1) | 61,455 | December 30, 2013 | 2013 |
93 | Star Axe II LLC | Star Lutas | 61,347 | January 6, 2016 | 2016 |
94 | Aurelia Shipping LLC | Honey Badger | 61,320 | February 27, 2015 | 2015 |
95 | Rainbow Maritime LLC | Wolverine | 61,292 | February 27, 2015 | 2015 |
96 | Star Axe I LLC | Star Antares | 61,258 | October 9, 2015 | 2015 |
97 | ABY Five Ltd | Star Monica | 60,935 | August 3, 2018 | 2015 |
98 | Star Asia I LLC | Star Aquarius | 60,916 | July 22, 2015 | 2015 |
99 | Star Asia II LLC | Star Pisces (1) | 60,916 | August 7, 2015 | 2015 |
100 | Star Nor XIV LLC | Star Glory (1) | 58,680 | July 6, 2018 | 2012 |
101 | STAR LIDA XI SHIPPING LLC | Pyxis (1) | 56,615 | August 19, 2019 | 2013 |
102 | STAR LIDA VIII SHIPPING LLC | Hydrus (1) | 56,604 | August 8, 2019 | 2013 |
103 | STAR LIDA IX SHIPPING LLC | Leo (1) | 56,582 | July 15, 2019 | 2013 |
104 | Star Trident VII LLC | Diva | 56,582 | July 24, 2017 | 2011 |
105 | STAR LIDA VI SHIPPING LLC | D.Centaurus (1) | 56,559 | September 18, 2019 | 2012 |
106 | STAR LIDA VII SHIPPING LLC | Hercules (1) | 56,545 | July 16, 2019 | 2012 |
107 | STAR LIDA X SHIPPING LLC | Pegasus (1) | 56,540 | July 15, 2019 | 2013 |
108 | STAR LIDA III SHIPPING LLC | Cepheus (1) | 56,539 | July 16, 2019 | 2012 |
109 | STAR LIDA IV SHIPPING LLC | Columba (1) | 56,530 | July 23, 2019 | 2012 |
110 | STAR LIDA V SHIPPING LLC | Dorado (1) | 56,507 | July 16, 2019 | 2013 |
111 | STAR LIDA II SHIPPING LLC | Aquila (1) | 56,506 | July 15, 2019 | 2012 |
112 | Star Regg III LLC | Star Bright | 55,783 | October 10, 2018 | 2010 |
113 | Glory Supra Shipping LLC | Strange Attractor | 55,742 | July 11, 2014 | 2006 |
114 | Star Omicron LLC | Star Omicron | 53,489 | April 17, 2008 | 2005 |
115 | Star Zeta LLC | Star Zeta | 52,994 | January 2, 2008 | 2003 |
116 | Star Theta LLC | Star Theta | 52,425 | December 6, 2007 | 2003 |
Total dwt | 12,859,300 |
(1) | Subject to a bareboat charter with purchase obligation at the expiration of the bareboat charter term. |
● | evaluate optimum operating parameters during various sea passage conditions; |
● | compare actual versus required vessel performance and fuel consumption; |
● | assess and evaluate vessel and equipment actual performance; |
● | take proactive steps, if needed, to ensure vessel and equipment operate in a reliable and efficient manner; |
● | minimize downtime and off-hires by proper planning and selecting the right timing for maintenance through the condition-based monitoring approach; |
● | identify timely potential operating problems; and |
● | ensure that our seafarers are well informed and taking necessary actions to reduce the likelihood of a malfunction. |
● | Newcastlemax vessels, which are vessels with carrying capacities of between 200,000 and 210,000 dwt. These vessels carry both iron ore and coal and they represent the largest vessels able to enter the port of Newcastle in Australia. There are relatively few ports around the world with the infrastructure to accommodate vessels of this size. |
● | Capesize vessels, which are vessels with carrying capacities of between 100,000 and 200,000 dwt. These vessels generally operate along long-haul iron ore and coal trade routes. There are relatively few ports around the world with the infrastructure to accommodate vessels of this size. |
● | Post-Panamax vessels, which are vessels with carrying capacities of between 90,000 and 100,000 dwt. These vessels tend to have a shallower draft and larger beam than a standard Panamax vessel, and a higher cargo capacity. These vessels have been designed specifically for loading high cubic cargoes from draft restricted ports, and they can transit the Panama Canal following the completion of its latest expansion. |
● | Panamax vessels, which are vessels with carrying capacities of between 65,000 and 90,000 dwt. These vessels carry coal, grains, and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers. Panamax vessels can pass through the Panama Canal. |
● | Ultramax vessels, which are vessels with carrying capacities of between 60,000 and 65,000 dwt. These vessels carry grains and minor bulks and operate along many global trade routes. They represent the largest and most modern version of Supramax bulk carrier vessels (see below). |
● | Handymax vessels, which are vessels with carrying capacities of between 35,000 and 60,000 dwt. The subcategory of vessels that have a carrying capacity of between 45,000 and 60,000 dwt are called Supramax. Handymax vessels operate along a large number of geographically dispersed global trade routes, mainly carrying grains and minor bulks. Vessels below 60,000 dwt are sometimes built with on-board cranes enabling them to load and discharge cargo in countries and ports with limited infrastructure. |
● | Handysize vessels, which are vessels with carrying capacities of up to 35,000 dwt. These vessels carry exclusively minor bulk cargo. Increasingly, these vessels have been operating along regional trading routes. Handysize vessels are well suited for small ports with length and draft restrictions that lack the infrastructure for cargo loading and unloading. |
(i) | injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs; |
(ii) | injury to, or economic losses resulting from, the destruction of real and personal property; |
(iii) | loss of subsistence use of natural resources that are injured, destroyed or lost; |
(iv) | net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources; |
(v) | lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and |
(vi) | net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources. |
● | Refrigerant Allowance: We have banned all the types of refrigerants that significantly affect the ozone layer such as R22 in order to reduce the Global Warming Potential (GWP). Additionally, during possible maintenance activities both in our offices and on vessels, we use eco-friendly refrigerants that do not affect the ozone layer such as R407 and R404. In compliance with EU 517/2014 regulation, stipulating restriction to the use of refrigerants exceeding GWP of 2500, we are using eco-friendly refrigerants in 30% of our fleet and we expect that100% of our fleet will have installed eco-friendly refrigerants within the next 5 years. |
● | Biodegradable Lubricants: We have decided to use these types of biodegradable lubricants proactively in 100% of our fleet regardless of their destination. Biodegradable lubricants are eco-friendly lubricants which are mandatory for vessels that transport cargo or have the United States as destination ports. |
● | We have proactively taken immediate steps to comply in 2019 with EU regulation (1257/2013 on Ship recycling), that will take effect on December 31, 2020. The regulation refers to vessel recycling activities and the identification and monitoring of hazardous materials, including: |
o | Asbestos |
o | PCBs |
o | Ozone depleting substances |
o | PFOS |
o | Anti-fouling systems containing organotin compounds as a biocide. |
C. | Organizational structure |
D. | Property, plant and equipment |
A. | Operating Results |
● | employment and operation of dry bulk vessels constituting our operating fleet; and |
● | management of the financial, general and administrative elements involved in the conduct of our business and ownership of dry bulk vessels constituting our operating fleet. |
● | vessel maintenance and repair; |
● | crew selection and training; |
● | vessel spares and stores supply; |
● | contingency response planning; |
● | onboard safety procedures auditing; |
● | accounting; |
● | vessel insurance arrangement; |
● | vessel chartering; |
● | vessel security training and security response plans pursuant to the requirements of the ISPS Code; |
● | obtaining ISM Code certification and audits for each vessel within the six months of taking over a vessel; |
● | vessel hire management; |
● | vessel surveying; and |
● | vessel performance monitoring. |
● | management of our financial resources, including banking relationships (i.e., administration of bank loans and bank accounts); |
● | management of our accounting system and records and financial reporting; |
● | administration of the legal and regulatory requirements affecting our business and assets; and |
● | management of the relationships with our service providers and customers. |
● | charter rates and duration of our charters; |
● | age, condition and specifications of our vessels |
● | levels of vessel operating expenses; |
● | depreciation and amortization expenses; |
● | fuel costs; |
● | financing costs; and |
● | fluctuations in foreign exchange rates. |
● | Average number of vessels is the number of vessels that constituted our owned fleet for the relevant period, as measured by the sum of the number of days each operating vessel was part of our owned fleet during the period divided by the number of calendar days in that period. |
● | Ownership days are the total number of calendar days each vessel in the fleet was owned by us for the relevant period, including vessels subject to sale and leaseback transactions and finance leases. |
● | Available days for the fleet are the Ownership days after subtracting off-hire days for major repairs, dry docking or special or intermediate surveys and scrubber installation. |
● | Charter-in days are the total days that we charter-in third-party vessels. |
● | Time charter equivalent rate. Represents the weighted average daily TCE rates of our operating fleet (including owned fleet and fleet under charter-in arrangements) (please refer below for its detailed calculation). |
Year ended December 31 , 2017 | Year ended December 31 , 2018 | Year ended December 31 , 2019 | ||||||||||
Average number of vessels | 69.6 | 87.7 | 112.1 | |||||||||
Number of vessels in operation (as of the last day of the periods reported) | 71 | 107 | 116 | |||||||||
Average age of operational fleet (in years) | 8.2 | 8.0 | 8.3 | |||||||||
Ownership days | 25,387 | 32,001 | 40,915 | |||||||||
Available days | 25,272 | 31,614 | 36,403 | |||||||||
Charter-in days | 428 | 5,089 | 6,843 | |||||||||
Time charter equivalent rate (TCE rate) | $ | 10,366 | $ | 13,796 | $ | 13,027 | ||||||
Voyage revenues | $ | 327,892 | $ | 651,561 | $ | 821,365 |
Year ended December 31, 2017 | Year ended December 31, 2018 | Year ended December 31, 2019 | |||||||||||
Voyage revenues | $ | 327,892 | (a) | $ | 651,561 | $ | 821,365 | ||||||
Less: | |||||||||||||
Voyage expenses | (63,034 | ) | (b) | (121,596 | ) | (222,962 | ) | ||||||
Charter-in hire expense | (2,197 | ) | (c) | (92,896 | ) | (126,813 | ) | ||||||
Realized gain/(loss) on FFAs/bunker swaps | (679 | ) | 892 | 4,657 | |||||||||
Amortization of fair value of below/above market acquired time charter agreements | - | (1,820 | ) | (2,013 | ) | ||||||||
Time charter equivalent revenues | $ | 261,982 | $ | 436,141 | $ | 474,234 | |||||||
Available days | 25,272 | 31,614 | 36,403 | ||||||||||
Daily Time Charter Equivalent Rate ("TCE") | $ | 10,366 | $ | 13,796 | $ | 13,027 |
(a) | Voyage revenues used to calculate TCE rate for the year ended December 31, 2017 consist of (1) reported voyage revenues of $332.0 million minus (2) voyage revenues of $4.1 million attributable to Star Logistics. |
(b) | Voyage expenses used to calculate TCE rate for the year ended December 31, 2017 consist of (1) reported voyage expenses of $64.7 million minus (2) voyage expenses of $1.7 million attributable to Star Logistics. |
(c) | Charter‐in hire expenses used to calculate TCE rate for the year ended December 31, 2017 consist of (1) reported charter‐in hire expenses of $5.3 million minus (2) charter‐in hire expenses of $3.1 million attributable to Star Logistics. |
B. | Liquidity and Capital Resources |
● | $108.0 million paid in connection with the acquisition of secondhand vessels and $95.8 million paid in connection with three newbuilding vessels delivered during the year ended December 31, 2019; |
● | $143.4 million paid for the acquisition and installation of scrubber equipment and ballast water management systems for certain of our vessels; |
● | $56.6 million of proceeds from the sale of seven vessels concluded during the period; and |
● | $10.7 million of insurance proceeds. |
● | $768.3 million of proceeds from financing transactions including financing from leases; |
● | $623.9 million lease and debt obligations paid in aggregate in connection with: (i) the regular amortization of outstanding vessel financings and finance lease installments and (ii) early repayment due to the refinancing of certain of our debt facilities and the sale of vessels; |
● | $20.5 million used mainly to repurchase our common shares under our previously announced share repurchase program; |
● | $13.1 million of financing fees paid in connection with the new financing agreements; |
● | $2.3 million of prepayment fees paid in connection with early repaid debt due to its refinancing; and |
● | $4.8 million of dividends paid in December 2019 for the third quarter of 2019. |
● | $988.0 million of proceeds from financing transactions including financing from leases; |
● | $875.0 lease and debt obligations paid in aggregate in connection with: (i) the regular amortization of outstanding vessel financings and finance lease installments, (ii) early repayment due to the refinancing of certain of our facilities; (iii) payments under our cash sweep mechanism and (iv) full repayment of deferred debt amounts; |
● | $3.1 million used to repurchase our common shares in open market transactions; and |
● | $13.8 million of financing fees paid in connection with the new financing agreements. |
1. | HSH Nordbank $35.0 million Facility |
2. | NIBC $32.0 million Facility |
3. | DVB $24.8 million Facility |
4. | Sinosure Facility |
5. | NBG $30.0 million Facility |
6. | DNB $310.0 million Facility |
7. | ING $100.6 million Facility |
8. | Citibank $130.0 million Facility |
9. | ABN $115.0 million Facility |
10. | BNP Facility |
11. | Bank of Tokyo Facility |
12. | Credit Agricole $43.0 million Facility |
13. | HSBC $80.0 million Facility |
14. | SEB Facility |
15. | E. SUN Facility |
16. | Atradius Facility |
17. | Citibank $62.6 million Facility |
18. | CTBC Facility |
19. | NTT Facility |
20. | CEXIM $106.5 million Facility |
21. | HSBC Working Capital Facility |
● | pay dividends if there is an event of default under our credit facilities; |
● | incur additional indebtedness, including the issuance of guarantees, or refinance or prepay any indebtedness, unless certain conditions exist; |
● | create liens on our assets; |
● | change the flag, class or management of our vessels or terminate or materially amend the management agreement relating to each vessel; |
● | acquire new or sell vessels, unless certain conditions exist; |
● | merge or consolidate with, or transfer all, or substantially all, our assets to another person; or |
● | enter into a new line of business. |
● | a minimum percentage of aggregate vessel value to loans secured (security cover ratio or “SCR”); |
● | a maximum ratio of total liabilities to market value adjusted total assets; |
● | a minimum EBITDA to interest coverage ratio; |
● | a minimum liquidity; and |
● | a minimum market value adjusted net worth. |
C. | Research and Development, Patents and Licenses |
D. | Trend Information |
E. | Off-balance Sheet Arrangements |
F. | Tabular Disclosure of Contractual Obligations |
In thousands of Dollars | Payments due by period | |||||||||||||||||||
Obligations | Total | Less than 1 year -2020 | 1-3 years (2021 -2022) | 3-5 years (2023-2024) | More than 5 years (After January 1, 2025) | |||||||||||||||
Principal Loan Payments (1) | 1,126,037 | 150,350 | 311,385 | 477,535 | 186,767 | |||||||||||||||
8.30% 2022 Notes | 50,000 | - | 50,000 | - | - | |||||||||||||||
Interest payments (2) | 183,143 | 50,398 | 80,246 | 32,006 | 20,493 | |||||||||||||||
Vessel upgrades (3) | 48,634 | 48,634 | - | - | - | |||||||||||||||
Bareboat commitments charter hire - Operating vessels (4) | 489,506 | 69,820 | 134,399 | 162,969 | 122,318 | |||||||||||||||
Future, minimum, charter-in hire payments (5) | 3,894 | 3,894 | - | - | - | |||||||||||||||
Office rent | 1,223 | 327 | 643 | 253 | - | |||||||||||||||
Total | 1,902,437 | 323,423 | 576,673 | 672,763 | 329,578 |
(1) | Principal loan payments pursuant to our credit facilities as further described in Note 9 to our audited consolidated financial statements included in this report. |
(2) | Amounts shown reflect interest payments we expect to make with respect to our long-term debt obligations, as well as 2022 Notes. The interest payments reflect an assumed LIBOR based on the applicable rate of 1.908% (the three-month LIBOR as of December 31, 2019) or 1.912% (the six-month LIBOR rate as of December 31, 2019), as applicable, plus the relevant margin of the applicable credit facility. The amounts shown do not include loan interest of $4.0 million and interest on the 8.30% 2022 Notes of $0.5 million which had accrued thereon as of December 31, 2019. |
(3) | Amounts represent remaining payments under our Scrubber Retrofitting Program. For the respective payments, we obtained total financing of $149.8 million, of which $46.2 million remained undrawn as of December 31, 2019 (as further described in Note 9 to our consolidated financial statements included in this report). |
(4) | The amounts represent our commitments under the bareboat lease arrangements for our operating vessels, representing the fixed and variable charter hire, which is further analyzed in Note 7 to our consolidated financial statements included in this report. The interest payments reflect an assumed 3-month LIBOR of 1.908% as of December 31, 2019, plus the relevant margin of the lease arrangements. |
(5) | The amounts represent our commitments under the outstanding as of December 31, 2019 time charter-in arrangements for third party vessels. |
● | reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values; |
● | news and industry reports of similar vessel sales; |
● | news and industry reports of sales of vessels that are not similar to our vessels, where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates; |
● | approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated; |
● | offers that we may have received from potential purchasers of our vessels; and |
● | vessel sale prices and values of which we are aware through both formal and informal communications with ship owners, shipbrokers, industry analysts and various other shipping industry participants and observers. |
Vessel Name | DWT | Year Built | Carrying Value as of December 31, 2019 (in millions of U.S dollars) | ||
1 | Goliath | 209,537 | 2015 | 55 | * |
2 | Gargantua | 209,529 | 2015 | 55 | * |
3 | Star Poseidon | 209,475 | 2016 | 37 | |
4 | Maharaj | 209,472 | 2015 | 55 | * |
5 | Star Leo (1) | 207,939 | 2018 | 51 | |
6 | Star Laetitia | 207,896 | 2017 | 47 | |
7 | Star Ariadne | 207,812 | 2017 | 52 | * |
8 | Star Virgo | 207,810 | 2017 | 50 | |
9 | Star Libra (1) | 207,765 | 2016 | 51 | * |
10 | Star Sienna | 207,721 | 2017 | 48 | |
11 | Star Marisa | 207,709 | 2016 | 53 | * |
12 | Star Karlie | 207,566 | 2016 | 48 | * |
13 | Star Eleni (1) | 207,555 | 2018 | 45 | |
14 | Star Magnanimus | 207,490 | 2018 | 55 | * |
15 | Debbie H | 206,861 | 2019 | 51 | |
16 | Star Ayesha | 206,852 | 2019 | 52 | |
17 | Katie K | 206,839 | 2019 | 51 | |
18 | Leviathan | 182,511 | 2014 | 34 | |
19 | Peloreus | 182,496 | 2014 | 34 | |
20 | Star Claudine (1) | 181,258 | 2011 | 30 | * |
21 | Star Ophelia (1) | 180,716 | 2010 | 29 | * |
22 | Star Martha | 180,274 | 2010 | 37 | * |
23 | Star Pauline | 180,233 | 2008 | 26 | * |
24 | Pantagruel | 180,181 | 2004 | 26 | * |
25 | Star Borealis | 179,678 | 2011 | 42 | * |
26 | Star Polaris | 179,546 | 2011 | 42 | * |
27 | Star Lyra (1) | 179,147 | 2009 | 28 | * |
28 | Star Janni | 178,978 | 2010 | 24 | |
29 | Star Marianne | 178,906 | 2010 | 21 | |
30 | Star Angie | 177,931 | 2007 | 30 | * |
31 | Big Fish | 177,662 | 2004 | 27 | * |
32 | Kymopolia | 176,990 | 2006 | 31 | * |
33 | Star Triumph | 176,343 | 2004 | 16 | |
34 | Star Scarlett | 175,800 | 2014 | 35 | * |
35 | Star Audrey | 175,125 | 2011 | 29 | * |
36 | Big Bang | 174,109 | 2007 | 33 | * |
Vessel Name | DWT | Year Built | Carrying Value as of December 31, 2019 (in millions of U.S dollars) |
37 | Star Paola | 115,259 | 2011 | 22 | * |
38 | Star Eva | 106,659 | 2012 | 20 | |
39 | Amami | 98,681 | 2011 | 24 | * |
40 | Madredeus | 98,681 | 2011 | 24 | * |
41 | Star Sirius | 98,681 | 2011 | 25 | * |
42 | Star Vega | 98,681 | 2011 | 25 | * |
43 | Star Aphrodite | 92,006 | 2011 | 21 | |
44 | Star Piera | 91,952 | 2010 | 20 | * |
45 | Star Despoina | 91,945 | 2010 | 20 | * |
46 | Star Electra (1) | 83,494 | 2011 | 22 | * |
47 | Star Angelina | 82,981 | 2006 | 19 | * |
48 | Star Gwyneth | 82,790 | 2006 | 21 | * |
49 | Star Kamila | 82,769 | 2005 | 18 | * |
50 | Star Luna (1) | 82,687 | 2008 | 17 | * |
51 | Star Bianca (1) | 82,672 | 2008 | 18 | * |
52 | Pendulum | 82,619 | 2006 | 18 | * |
53 | Star Maria | 82,598 | 2007 | 16 | * |
54 | Star Markella | 82,594 | 2007 | 17 | * |
55 | Star Danai | 82,574 | 2006 | 17 | * |
56 | Star Jeanette | 82,567 | 2014 | 25 | |
57 | Star Georgia | 82,298 | 2006 | 14 | |
58 | Star Sophia | 82,269 | 2007 | 16 | |
59 | Star Mariella | 82,266 | 2006 | 18 | * |
60 | Star Moira | 82,257 | 2006 | 16 | * |
61 | Star Nina | 82,224 | 2006 | 13 | |
62 | Star Renee | 82,221 | 2006 | 14 | |
63 | Star Nasia | 82,220 | 2006 | 20 | * |
64 | Star Laura | 82,209 | 2006 | 14 | |
65 | Star Jennifer | 82,209 | 2006 | 12 | |
66 | Star Mona (1) | 82,188 | 2012 | 22 | * |
67 | Star Helena | 82,187 | 2006 | 15 | * |
68 | Star Astrid (1) | 82,158 | 2012 | 21 | * |
69 | Star Alessia | 81,944 | 2017 | 28 | |
70 | Star Calypso (1) | 81,918 | 2014 | 24 |
Vessel Name | DWT | Year Built | Carrying Value as of December 31, 2019 (in millions of U.S dollars) |
71 | Star Charis | 81,711 | 2013 | 16 | |
72 | Star Suzanna | 81,711 | 2013 | 16 | |
73 | Mercurial Virgo | 81,545 | 2013 | 23 | * |
74 | Stardust (1) | 81,502 | 2011 | 20 | * |
75 | Star Sky (1) | 81,466 | 2010 | 20 | * |
76 | Star Lydia | 81,187 | 2013 | 25 | * |
77 | Star Nicole | 81,120 | 2013 | 24 | * |
78 | Star Virginia | 81,061 | 2015 | 27 | |
79 | Star Genesis (1) | 80,705 | 2010 | 20 | * |
80 | Star Flame (1) | 80,448 | 2011 | 21 | * |
81 | Star Iris | 76,466 | 2004 | 16 | * |
82 | Star Emily | 76,417 | 2004 | 15 | * |
83 | Idee Fixe (1) | 63,458 | 2015 | 28 | * |
84 | Roberta (1) | 63,426 | 2015 | 27 | * |
85 | Laura (1) | 63,399 | 2015 | 27 | * |
86 | Kaley (1) | 63,283 | 2015 | 28 | * |
87 | Kennadi | 63,262 | 2016 | 28 | * |
88 | Mackenzie | 63,226 | 2016 | 17 | |
89 | Apus (1) | 63,123 | 2014 | 18 | |
90 | Star Wave (1) | 61,491 | 2017 | 27 | * |
91 | Star Challenger (1) | 61,462 | 2012 | 24 | * |
92 | Star Fighter (1) | 61,455 | 2013 | 24 | * |
93 | Star Lutas | 61,347 | 2016 | 27 | * |
94 | Honey Badger | 61,320 | 2015 | 28 | * |
95 | Wolverine | 61,292 | 2015 | 28 | * |
96 | Star Antares | 61,258 | 2015 | 27 | * |
97 | Star Monica | 60,935 | 2015 | 26 | * |
98 | Star Aquarius | 60,916 | 2015 | 21 | |
99 | Star Pisces (1) | 60,916 | 2015 | 21 | |
100 | Star Glory (1) | 58,680 | 2012 | 16 | * |
Vessel Name | DWT | Year Built | Carrying Value as of December 31, 2019 (in millions of U.S dollars) |
101 | Pyxis (1) | 56,615 | 2013 | 12 | |
102 | Hydrus (1) | 56,604 | 2013 | 12 | |
103 | Leo (1) | 56,582 | 2013 | 12 | |
104 | Diva | 56,582 | 2011 | 12 | |
105 | D. Centaurus (1) | 56,559 | 2012 | 11 | |
106 | Hercules (1) | 56,545 | 2012 | 11 | |
107 | Pegasus (1) | 56,540 | 2013 | 12 | |
108 | Cepheus (1) | 56,539 | 2012 | 11 | |
109 | Columba (1) | 56,530 | 2012 | 11 | |
110 | Dorado (1) | 56,507 | 2013 | 12 | |
111 | Aquila (1) | 56,506 | 2012 | 13 | |
112 | Star Bright | 55,783 | 2010 | 13 | |
113 | Strange Attractor | 55,742 | 2006 | 18 | * |
114 | Star Omicron | 53,489 | 2005 | 14 | * |
115 | Star Zeta | 52,994 | 2003 | 10 | * |
116 | Star Theta | 52,425 | 2003 | 10 | * |
Total dwt | 12,859,300 | 2,965 |
(1) | Vessels subject to a bareboat charter with purchase obligation at the expiration of the bareboat charter term. |
* | Indicates dry bulk carrier vessels for which we believe, as of December 31, 2019, the basic charter-free market value is lower than the vessel’s carrying value. |
G. | Safe Harbor |
A. | Directors and Senior Management |
Name | Age | Position | ||
Petros Pappas | 67 | Chief Executive Officer and Class C Director | ||
Spyros Capralos | 65 | Non-Executive Chairman and Class C Director | ||
Hamish Norton | 61 | President | ||
Simos Spyrou | 45 | Co-Chief Financial Officer | ||
Christos Begleris | 38 | Co-Chief Financial Officer | ||
Nicos Rescos | 48 | Chief Operating Officer | ||
Charis Plakantonaki | 41 | Chief Strategy Officer | ||
Tom Søfteland | 59 | Class A Director | ||
Koert Erhardt | 64 | Class B Director | ||
Mahesh Balakrishnan | 37 | Class A Director | ||
Nikolaos Karellis | 69 | Class A Director | ||
Arne Blystad | 65 | Class C Director | ||
Raffaele Zagari | 51 | Class C Director | ||
Brian Laibow | 43 | Class B Director | ||
Dawna Men | 26 | Class B Director |
B. | Compensation of Directors and Senior Management |
● | On February 22, 2017, 544,000 restricted common shares were granted to certain of our directors and officers, all of which vested on August 22, 2017. |
● | On February 27, 2018, 396,500 restricted common shares were granted to certain of our directors and officers, of which 253,500 restricted common shares vested on August 27, 2018, 71,500 restricted common shares vested on February 27, 2019 and the remaining 71,500 restricted common shares will vest on February 27, 2021. |
● | On May 22, 2019, 567,157 restricted common shares were granted to certain of the Company’s directors and officers of which 367,620 restricted common shares vested in August 2019, 99,769 restricted common shares will vest in August 2020 and the remaining 99,769 restricted common shares will vest in August 2022. |
C. | Board Practices |
● | The term of the Class A directors expires on May 12, 2020; |
● | The term of the Class B directors expires in 2021; and |
● | The term of the Class C directors expires in 2022. |
D. | Employees |
E. | Share Ownership |
A. | Major Shareholders |
Common Shares Beneficially Owned as of | ||||||||||||||||||||||||
February 29, 2020 | February 28, 2019 | February 27, 2018 | ||||||||||||||||||||||
Beneficial Owner | Amount | Percentage | Amount | Percentage | Amount | Percentage | ||||||||||||||||||
Oaktree Capital Group Holdings GP, LLC and certain of its advisory clients (2) | 35,129,436 | 36.6 | % | 31,587,490 | 33.9 | % | 32,579,506 | 50.8 | % | |||||||||||||||
Impala Asset Management LLC(3) | 5,622,913 | 5.9 | % | n/a | n/a | 4,094,420 | 6.4 | % | ||||||||||||||||
Augustea Entities(4) | 4,384,520 | 4.6 | % | 4,622,897 | 5.0 | % | n/a | n/a | ||||||||||||||||
Entities affiliated with Petros Pappas | 4,096,718 | 4.3 | % | 3,912,988 | 4.2 | % | 2,934,649 | 4.6 | % | |||||||||||||||
Entities affiliated with Arne Blystad | 2,159,505 | 2.2 | % | 2,159,505 | 2.3 | % | n/a | n/a | ||||||||||||||||
Oceanbulk Container Carriers LLC(5) | 2,974,261 | 3.1 | % | 2,974,261 | 3.2 | % | n/a | n/a | ||||||||||||||||
Directors and executive officers of the Company, in the aggregate (6) | 1,377,672 | 1.4 | % | 1,092,499 | 1.2 | % | 980,266 | 1.5 | % |
(1) | Percentage amounts based on 96,074,497 common shares outstanding as of February 29, 2020, 93,089,717 common shares outstanding as of February 28, 2019 and 64,160,004 common shares outstanding as of February 27, 2018. |
(2) | As of February 29, 2020, consists of (i) 1,316,498 shares held by Oaktree Value Opportunities Fund, L.P. (“VOF”), (ii) 2,397,106 shares held by Oaktree Opportunities Fund IX Delaware, L.P. (“Fund IX”), (iii) 22,016 shares held by Oaktree Opportunities Fund IX (Parallel 2), L.P. (“Parallel 2”), (iv) 11,445,307 shares held by Oaktree Dry Bulk Holdings LLC (“Dry Bulk Holdings”), (v) 19,726,429 shares held by OCM XL Holdings L.P., a Cayman Islands exempted limited partnership (“OCM XL”) and (vi) 222,080 shares held by OCM FIE, LLC (“FIE”). Each of the foregoing funds and entities is affiliated with Oaktree Capital Group, LLC (“OCG”) which is managed by its ten-member board of directors which is comprised of members appointed by each of Oaktree Capital Group Holdings GP, LLC and Brookfield Asset Management, Inc. Each of the direct and indirect general partners, managing members, directors, unit holders, shareholders, and members of VOF, Fund IX, Parallel 2, Dry Bulk Holdings, OCM XL and FIE, may be deemed to share voting and dispositive power over the shares owned by such entities, but disclaims beneficial ownership in such shares except to the extent of any pecuniary interest therein. The address for these entities (collectively, the “Oaktree Funds”) is c/o Oaktree Capital Management, L.P., 333 South Grand Avenue, 28th Floor, Los Angeles, California 90071. |
(3) | Based on a Schedule 13G filed with the SEC on February 14, 2020, by Impala Asset Management LLC. The address of Impala Asset Management LLC is 324 Royal Palm Way, Palm Beach, Florida 33480. |
(4) | As of February 29, 2020, consists of (i) 2,969,771 shares beneficially owned directly by Augustea MED Limited, a Malta limited liability company (“Augustea MED”), (ii) 1,370,044 shares beneficially owned directly by Augustea Bunge Maritime Limited, a Malta limited liability company (“ABML”) and (iii) 44,705 shares beneficially directly owned by Augustea Oceanbulk Maritime Malta Limited, a Malta limited liability company (“Augustea Oceanbulk”). Augustea MED is owned by Augustea Atlantica S.p.A, a joint stock limited liability company incorporated in Italy (“Augustea Atlantica”), ABML is 50.85% owned by Augustea Atlantica and 49.15% owned by Bunge Investment Management Limited, a British Virgin Islands limited liability company (“BIML”), however, certain matters require the approval of 75% of the issued shares and Augustea Oceanbulk is (a) 0.12% owned directly by Augustea Atlantica and (b) 65.84% owned by Augustea Malta Holding Limited, which is wholly owned by Augustea Atlantica. Augustea Atlantica is wholly owned by Augustea Holding S.p.A., a joint stock limited liability company incorporated in Italy (“Augustea Holding”). The directors of Augustea Holding are Raffaele Zagari (Chairman, Executive Director and CEO), Maurizio Pavesi (Executive Director and CFO), Pietrantonio Cafiero (Non-executive Director), Roberto Donnini (Non-executive, Independent Director) and Stefano Ferrailo (Non-executive, Independent Director). Mr. Raffaele Zagari was appointed as a member of the Company’s Board of Directors on August 3, 2018. |
(5) | All of the 2,974,261 common shares that are currently directly held by Oceanbulk Container Carriers LLC will be distributed to Oaktree when such a distribution were to take place. |
(6) | These numbers of shares do not include shares beneficially owned by Messrs, Pappas, Blystad and Zagari, that are presented within line items “Entities affiliated with Petros Pappas”, “Entities affiliated with Arne Blystad” and “Augustea Entities”, respectively, above. |
B. | Related Party Transactions |
● | sales that have received Disinterested Director Approval; |
● | a tender offer or exchange offer, by an Unaffiliated Buyer, that is made to all of our shareholders, so long as such offer would not result in a Change of Control Transaction, unless the consummation of such Change of Control Transaction has received Disinterested Director Approval; |
● | transfers to an Affiliate of the Oaktree Shareholders that is an investment fund or managed account in accordance with the Oaktree Shareholders Agreement; and |
● | sales in the open market (including sales conducted by a third-party underwriter, initial purchaser or broker-dealer) in which the Oaktree Shareholder or their Affiliates do not know (and would not in the exercise of reasonable commercial efforts be able to determine) the identity of the purchaser. |
C. | Interests of Experts and Counsel |
A. | Consolidated statements and other financial information. |
a. | $1.00 million for December 31, 2019; |
b. | $1.15 million for March 31, 2020 |
c. | $1.30 million for June 30, 2020 |
d. | $1.45 million for September 30, 2020 |
e. | $1.60 million for December 31, 2020 |
f. | $1.75 million for March 31, 2021 |
g. | $1.90 million for June 30, 2021 |
h. | $2.10 million for September 30, 2021 |
B. | Significant Changes. |
A. | Offer and Listing Details |
A. | Share Capital |
B. | Memorandum and Articles of Association |
● | 300,000,000 common shares, par value $0.01 per share; and |
● | 25,000,000 preferred shares, par value $0.01 per share. Our board of directors shall have the authority to issue all or any of the preferred shares in one or more classes or series with such voting powers, designations, preferences and relative, participating, optional or special rights and qualifications, limitations or restrictions as shall be stated in the resolutions providing for the issue of such class or series of preferred shares. |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation |
F. | Dividends and paying agents |
G. | Statement by experts |
H. | Documents on display |
I. | Subsidiary information |
For the year Ending December 31, | Estimated amount of interest expense | Estimated amount of interest expense after an increase of 100 basis points | Sensitivity | |||
2020 | 69.7 | 84.0 | 14.3 | |||
2021 | 60.4 | 72.7 | 12.3 | |||
2022 | 50.4 | 60.7 | 10.3 | |||
2023 | 31.0 | 38.0 | 7.0 | |||
2024 | 16.6 | 20.5 | 3.9 |
In thousands of Dollars | As of year ended December 31, | |||||||||||||||||||
2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||||||
Long-Term Debt: | ||||||||||||||||||||
Variable Rate Debt, outstanding balance | $ | 1,352,844 | $ | 1,154,548 | $ | 933,749 | $ | 443,407 | $ | 305,691 | ||||||||||
Average Interest Rate on Variable Debt (1) | 4.5 | % | 4.7 | % | 4.7 | % | 4.7 | % | 4.4 | % | ||||||||||
Fixed-Rate Debt, outstanding balance | 50,000 | 50,000 | - | - | - | |||||||||||||||
Average Interest Rate on Fixed Debt (2) | 8.3 | % | 8.3 | % | 8.3 | % | - | - |
(1) | Average Interest Rate on Variable Debt represents the weighted average interest rate for our floating rate debt and leases comprising of LIBOR rate as of December 31, 2019 and applicable margin. |
(2) | Average Interest Rate on Fixed Debt represents the annual coupon for our 8.30% 2022 Notes outstanding as of December 31, 2019. |
Counterparty | Inception | Expiry | Fixed Rate | Amortizing Notional amount | Average Annual amortization | |||||
ING | 29-Mar-20 | 29-Mar-26 | 0.70 | % | from $29.96 mil to $17.65 mil | $1.2 million | ||||
DNB | 30-Mar-20 | 28-Sep-23 | 0.64 | % | from $128.91 mil to $51.02 mil | $6.0 million | ||||
SEB | 30-Mar-20 | 28-Sep-23 | 0.63 | % | from $51.57 mil to $20.41 mil | $2.4 million | ||||
ING | 2-Apr-20 | 2-Oct-25 | 0.70 | % | from $19.69 mil to $9.84 mil | $1.9 million | ||||
ING | 2-Apr-20 | 2-Oct-25 | 0.70 | % | from $19.69 mil to $9.84 mil | $1.9 million | ||||
ING | 3-Apr-20 | 3-Apr-23 | 0.68 | % | from $16.16 mil to $12.74 mil | $0.3 million | ||||
SEB | 30-Apr-20 | 30-Jan-25 | 0.73 | % | from $29.44 mil to $19.25 mil | $2.7 million | ||||
SEB | 30-Apr-20 | 30-Jan-25 | 0.73 | % | from $29.44 mil to $19.25 mil | $2.7 million |
A. | Debt securities |
B. | Warrants and rights |
C. | Other securities |
D. | American depository shares |
(a) | (Disclosure Controls and Procedures |
(b) | Management’s Annual Report on Internal Control Over Financial Reporting |
● | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; |
● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements. |
(In thousands of Dollars) | ||||||||
2018 | 2019 | |||||||
Audit fees (a) | $ | 656 | $ | 709 | ||||
Audit-related fees (b) | 17 | 39 | ||||||
Tax fees (c) | – | – | ||||||
All other fees (d) | – | – | ||||||
Total fees | $ | 673 | $ | 748 |
(a) | Audit Fees: Audit fees represent professional services rendered for the audit of our annual financial statements and services provided by the principal accountant in connection with statutory and regulatory filings or engagements. |
(b) | Audit-Related Fees: Audit-related fees consisted of assurance and other services which have not been reported under Audit Fees above. |
(c) | Tax Fees: Tax fees represent fees for professional services for tax compliance, tax advice and tax planning. |
(d) | All Other Fees: All other fees include services other than audit fees, audit-related fees and tax fees set forth above. |
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) (1) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
November 29-30, 2018 | 63,864 | $ | 9.5357 | 63,864 | $ | 49,383,454 | ||||||||||
December 1-31, 2018 | 277,499 | $ | 9.0473 | 277,499 | $ | 46,868,823 | ||||||||||
February 1-28, 2019 | 195,605 | $ | 8.1017 | 195,605 | $ | 45,284,504 | ||||||||||
April 1-30, 2019 | 1,339,717 | $ | 7.2407 | 1,339,717 | $ | 35,431,526 | ||||||||||
July 1-31, 2019 | 1,020,000 | $ | 8.4000 | 1,020,000 | $ | 26,863,526 | ||||||||||
August 1-31, 2019 | 43,873 | $ | 8.9855 | 43,873 | $ | 26,469,626 | ||||||||||
Total | 2,940,558 | N/A | 2,940,558 | N/A |
● | While our board of directors is currently comprised of directors a majority of whom are independent, we cannot assure you that in the future we will have a majority of independent directors. Our board of directors does not hold annual meetings or executive sessions at which only independent directors are present. |
● | Consistent with Marshall Islands law requirements, in lieu of obtaining an independent review of related party transactions for conflicts of interests, our Bylaws require any director who has a potential conflict of interest to identify and declare the nature of the conflict to the board of directors at the next meeting of the board of directors. Our code of ethics and Bylaws additionally provide that related party transactions must be approved by a majority of the independent and disinterested directors. If the votes of such independent and disinterested directors are insufficient to constitute an act of the board of directors, then the related party transaction may be approved by a unanimous vote of the disinterested directors. |
● | In lieu of obtaining shareholder approval prior to the issuance of designated securities, we plan to obtain the approval of our board of directors for such share issuances. |
● | While our audit, compensation and nominating and corporate governance committees are currently comprised of directors who are all independent, we cannot assure you that in the future we will have committees composed completely of independent directors. |
Exhibit Number | Description | |
Fourth Amended and Restated Articles of Incorporation of Star Bulk Carriers Corp. (included as Exhibit 3.1 of the Company’s Form 6-K, which was filed with the Commission on June 23, 2016 and incorporated herein by reference). | ||
Third Amended and Restated Bylaws of the Company (included as Exhibit 1.2 of the Company’s Form 20-F, which was filed with the Commission on April 8, 2015 and incorporated herein by reference) | ||
Form of Share Certificate (included as Exhibit 2.1 of the Company’s Form 20-F, which was filed with the Commission on April 8, 2015 and incorporated herein by reference) | ||
Base Indenture, dated as of November 6, 2014, between the Company and U.S. Bank National Association, as trustee (the “Trustee”) (included as Exhibit 4.1 to the Company’s Current Report on Form 6-K, dated November 7, 2014 and incorporated herein by reference) | ||
Second Supplemental Indenture, dated as of November 9, 2017, between the Company and the Trustee (included as Exhibit 4.2 to the Company’s Current Report on Form 6-K, dated November 13, 2017 and incorporated herein by reference) | ||
Amended and Restated Registration Rights Agreement dated July 11, 2014 (included as Annex E to Exhibit 99.1 to the Company’s Current Report on Form 6-K, dated June 20, 2014 and incorporated herein by reference) | ||
Amendment No.1 to Amended and Restated Registration Rights Agreement dated August 28, 2014 (included as Exhibit 99.2 to the Company’s Current Report on Form 6-K, dated September 3, 2014 and incorporated herein by reference) | ||
Amendment No.2 to Amended and Restated Registration Rights Agreement dated May 15, 2017. | ||
Amendment No.3 to Amended and Restated Registration Rights Agreement dated August 3, 2018. | ||
Oaktree Shareholders Agreement (included as Annex B to Exhibit 99.1 to the Company’s Current Report on Form 6‑K, dated June 20, 2014 and incorporated herein by reference. | ||
Pappas Shareholder Agreement by and among the Company and the parties named therein dated July 11, 2014 (included as Exhibit 99.3 to the Company’s Current Report on Form 6-K, dated June 16, 2014 and incorporated herein by reference) | ||
2017 Equity Incentive Plan (included as Exhibit 4.9 to the Company’s Form 20-F, which was filed with the Commission on March 22, 2018 and incorporated herein by reference) | ||
2018 Equity Incentive Plan (included as Exhibit 4.10 to the Company’s Form 20-F, which was filed with the Commission on March 22, 2018 and incorporated herein by reference) | ||
2019 Equity Incentive Plan | ||
Description of Common Shares | ||
Description of 8.30% Senior Notes due 2022 |
Exhibit Number | Description | ||
Certification of the Principal Executive Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||
Certification of the Principal Financial Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||
Consent of Independent Registered Public Accounting Firm (Ernst & Young (Hellas) Certified Auditors Accountants S.A.) | |||
Consent of Independent Registered Public Accounting Firm (Deloitte Certified Public Accountants S.A.) | |||
101 | The following materials from the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2019, formatted in Extensible Business Reporting Language (XBRL): | ||
(i) | Consolidated Balance Sheets as of December 31, 2018 and 2019; | ||
(ii) | Consolidated Statements of Operations for the years ended December 31, 2017, 2018 and 2019; | ||
(iv) | Consolidated Statements of Shareholders’ Equity for the for the years ended December 31, 2017, 2018 and 2019; | ||
(v) | Consolidated Statements of Cash Flows for the for the years ended December 31, 2017, 2018 and 2019; and | ||
(vi) | the Notes to Consolidated Financial Statements. |
Star Bulk Carriers Corp. | |||
(Registrant) | |||
By: | /s/ Petros Pappas | ||
Name: | Petros Pappas | ||
Title: | Chief Executive Officer |
Page | |
Report of Independent Registered Public Accounting Firm: Deloitte Certified Public Accountants S.A. | F-2 |
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting: Deloitte Certified Public Accountants S.A. | F-3 |
Report of Independent Registered Public Accounting Firm: Ernst & Young (Hellas) Certified Auditors Accountants S.A. | F-4 |
Consolidated Balance Sheets as of December 31, 2018 and 2019 | F-5 |
Consolidated Statements of Operations for the years ended December 31, 2017, 2018 and 2019 | F-6 |
Consolidated Statements of Comprehensive Income / (Loss) for the years ended December 31, 2017, 2018 and 2019 | F-7 |
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2017, 2018 and 2019 | F-8 |
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2018 and 2019 | F-9 |
Notes to Consolidated Financial Statements | F-10 |
To the Shareholders and the Board of Directors of Star Bulk Carriers Corp.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Star Bulk Carriers Corp. and subsidiaries (the “Company”) as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019, of the Company and our report dated March 20, 2020, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report on Internal Control Over Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
March 27, 2020December 31, 2018 | December 31, 2019 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 204,921 | $ | 117,819 | ||||
Restricted cash, current (Note 9) | 6,435 | 7,422 | ||||||
Trade accounts receivable, net | 38,402 | 58,785 | ||||||
Inventories (Note 4) | 27,436 | 51,153 | ||||||
Due from managers | 284 | 899 | ||||||
Due from related parties (Note 3) | 1,322 | 590 | ||||||
Prepaid expenses and other receivables | 6,504 | 17,745 | ||||||
Derivative asset, current (Note 20) | 537 | 216 | ||||||
Other current assets (Notes 3 and 18) | 7,046 | 11,413 | ||||||
Vessel held for sale (Note 5) | 5,949 | - | ||||||
Total Current Assets | 298,836 | 266,042 | ||||||
FIXED ASSETS | ||||||||
Advances for vessels under construction and acquisition of vessels (Note 6) | 59,900 | - | ||||||
Vessels and other fixed assets, net (Note 5) | 2,656,108 | 2,965,527 | ||||||
Total Fixed Assets | 2,716,008 | 2,965,527 | ||||||
OTHER NON-CURRENT ASSETS | ||||||||
Long term investment (Note 3) | 1,108 | 1,162 | ||||||
Restricted cash, non-current (Note 9) | 2,521 | 1,021 | ||||||
Leased buildings, right-of-use assets (Note 2) | - | 1,216 | ||||||
Other non-current assets | 3,664 | 3,703 | ||||||
TOTAL ASSETS | $ | 3,022,137 | $ | 3,238,671 | ||||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Current portion of long term debt (Note 9) | $ | 101,007 | $ | 150,350 | ||||
Lease financing short term (Note 7) | 65,837 | 52,145 | ||||||
Accounts payable | 20,959 | 42,779 | ||||||
Due to managers | 3,757 | 5,781 | ||||||
Due to related parties (Note 3) | 1,649 | 4,017 | ||||||
Accrued liabilities (Note 15) | 16,854 | 46,761 | ||||||
Derivative liability (Note 20) | 1,799 | 1,724 | ||||||
Deferred revenue | 10,855 | 7,374 | ||||||
Total Current Liabilities | 222,717 | 310,931 | ||||||
NON-CURRENT LIABILITIES | ||||||||
8.30% 2022 Notes, net of unamortized debt issuance costs of $1,590 and $1,179, as of December 31, 2018 and 2019, respectively (Note 9) | 48,410 | 48,821 | ||||||
Long term debt, net of current portion and unamortized debt issuance costs of $10,997 and $15,098, as of December 31, 2018 and 2019, respectively (Note 9) | 685,819 | 960,589 | ||||||
Lease financing long term, net of unamortized debt issuance costs of $2,975 and $3,936, as of December 31, 2018 and 2019 respectively (Note 7) | 540,925 | 369,831 | ||||||
Fair value of below market time charters acquired (Note 8) | 3,553 | 2,473 | ||||||
Leased buildings, operating lease liabilities (Note 2) | - | 1,216 | ||||||
Other non-current liabilities | 668 | 770 | ||||||
TOTAL LIABILITIES | 1,502,092 | 1,694,631 | ||||||
COMMITMENTS & CONTINGENCIES (Note 17) | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Preferred Shares; $0.01 par value, authorized 25,000,000 shares; none issued or outstanding at December 31, 2018 and 2019, respectively (Note 10) | - | - | ||||||
Common Shares, $0.01 par value, 300,000,000 shares authorized; 92,627,349 shares issued and 92,285,986 shares (net of treasury shares) outstanding at December 31, 2018; 96,073,197 shares issued and 96,066,226 shares (net of treasury shares) outstanding as of December 31, 2019 (Note 10) | 926 | 961 | ||||||
Additional paid in capital | 2,502,429 | 2,544,342 | ||||||
Treasury shares (341,363 and 6,971 shares at December 31, 2018 and 2019, respectively) | (3,145 | ) | (93 | ) | ||||
Accumulated deficit | (980,165 | ) | (1,001,170 | ) | ||||
Total Shareholders' Equity | 1,520,045 | 1,544,040 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 3,022,137 | $ | 3,238,671 |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Revenues: | ||||||||||||
Voyage revenues (Note 18) | $ | 331,976 | $ | 651,561 | $ | 821,365 | ||||||
Expenses | ||||||||||||
Voyage expenses (Note 3 and 19) | 64,682 | 121,596 | 222,962 | |||||||||
Charter-in hire expenses (Note 3) | 5,325 | 92,896 | 126,813 | |||||||||
Vessel operating expenses (Note 19) | 101,428 | 128,872 | 160,062 | |||||||||
Dry docking expenses | 4,262 | 8,970 | 57,444 | |||||||||
Depreciation | 82,623 | 102,852 | 124,280 | |||||||||
Management fees (Note 3 and 12) | 7,543 | 11,321 | 17,500 | |||||||||
General and administrative expenses (Note 3) | 30,955 | 33,972 | 34,819 | |||||||||
Impairment loss (Note 5 and 20) | - | 17,784 | 3,411 | |||||||||
Other operational loss | 989 | 191 | 110 | |||||||||
Other operational gain (Note 11) | (2,918 | ) | - | (2,423 | ) | |||||||
Provision for doubtful debts | - | 722 | 1,607 | |||||||||
(Gain)/Loss on forward freight agreements and bunker swaps (Note 20) | 841 | 447 | (4,411 | ) | ||||||||
(Gain)/Loss on sale of vessels ( Note 5) | (2,598 | ) | - | 5,493 | ||||||||
293,132 | 519,623 | 747,667 | ||||||||||
Operating income / (loss) | 38,844 | 131,938 | 73,698 | |||||||||
Other Income/ (Expenses): | ||||||||||||
Interest and finance costs (Note 9) | (50,458 | ) | (73,715 | ) | (87,617 | ) | ||||||
Interest and other income/(loss) | 2,997 | 1,866 | 1,299 | |||||||||
Gain / (Loss) on derivative financial instruments, net (Note 20) | 246 | 707 | - | |||||||||
Loss on debt extinguishment (Note 9) | (1,257 | ) | (2,383 | ) | (3,526 | ) | ||||||
Total other expenses, net | (48,472 | ) | (73,525 | ) | (89,844 | ) | ||||||
Income / (loss) before taxes and equity in income of investee | $ | (9,628 | ) | $ | 58,413 | $ | (16,146 | ) | ||||
Income taxes (Note 16) | (236 | ) | (61 | ) | (109 | ) | ||||||
Income/(Loss) before equity in income of investee | (9,864 | ) | 58,352 | (16,255 | ) | |||||||
Equity in income of investee | 93 | 45 | 54 | |||||||||
Net income/(loss) | (9,771 | ) | 58,397 | (16,201 | ) | |||||||
Earnings / (Loss) per share, basic | $ | (0.16 | ) | $ | 0.76 | $ | (0.17 | ) | ||||
Earnings / (Loss) per share, diluted | (0.16 | ) | 0.76 | (0.17 | ) | |||||||
Weighted average number of shares outstanding, basic (Note 14) | 63,034,394 | 77,061,227 | 93,735,549 | |||||||||
Weighted average number of shares outstanding, diluted (Note 14) | 63,034,394 | 77,326,111 | 93,735,549 |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Net income / (loss) | $ | (9,771 | ) | $ | 58,397 | $ | (16,201 | ) | ||||
Other comprehensive income / (loss): | ||||||||||||
Unrealized gains / losses from cash flow hedges: | ||||||||||||
Unrealized gain / (loss) from hedging interest rate swaps recognized in Other comprehensive income/(loss) before reclassifications | 47 | 106 | - | |||||||||
Less: | ||||||||||||
Reclassification adjustments of interest rate swap gain/(loss) | 852 | (711 | ) | - | ||||||||
Other comprehensive income / (loss) | 899 | (605 | ) | - | ||||||||
Total comprehensive income / (loss) | $ | (8,872 | ) | $ | 57,792 | $ | (16,201 | ) |
Common Stock | ||||||||||||||||||||||||||||
# of Shares | Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive income/(loss) | Accumulated deficit | Treasury stock | Total Shareholders' Equity | ||||||||||||||||||||||
BALANCE, January 1, 2017 | 56,628,907 | $ | 566 | $ | 2,063,490 | $ | (294 | ) | $ | (1,026,532 | ) | $ | - | $ | 1,037,230 | |||||||||||||
Net income / (loss) | - | $ | - | $ | - | $ | - | $ | (9,771 | ) | $ | - | $ | (9,771 | ) | |||||||||||||
Other comprehensive income / (loss) | - | - | - | 899 | - | - | 899 | |||||||||||||||||||||
Issuance of vested and non-vested shares and amortization of share-based compensation (Note 13) | 1,220,825 | 13 | 9,254 | - | - | - | 9,267 | |||||||||||||||||||||
Issuance of common stock (Note 10) | 6,310,272 | 63 | 50,364 | - | - | - | 50,427 | |||||||||||||||||||||
BALANCE, December 31, 2017 | 64,160,004 | $ | 642 | $ | 2,123,108 | $ | 605 | $ | (1,036,303 | ) | $ | - | $ | 1,088,052 | ||||||||||||||
Cumulative effect of accounting change | - | - | - | - | (2,259 | ) | - | (2,259 | ) | |||||||||||||||||||
Net income / (loss) | - | - | - | - | 58,397 | - | 58,397 | |||||||||||||||||||||
Other comprehensive income / (loss) | - | - | - | (605 | ) | - | - | (605 | ) | |||||||||||||||||||
Issuance of vested and non-vested shares and amortization of share-based compensation (Note 13) | 868,975 | 8 | 8,064 | - | - | - | 8,072 | |||||||||||||||||||||
Secondary offering expenses | - | - | (2,032 | ) | - | - | - | (2,032 | ) | |||||||||||||||||||
Acquisition of OCC Vessels (Note 5 and 10) | 3,304,735 | 33 | 42,929 | - | - | - | 42,962 | |||||||||||||||||||||
Acquisition of Songa Vessels (Note 3, 5 and 10) | 13,725,000 | 137 | 182,543 | - | - | - | 182,680 | |||||||||||||||||||||
Acquisition of Augustea Vessels (Note 3, 5 and 10) | 10,277,335 | 103 | 143,780 | - | - | - | 143,883 | |||||||||||||||||||||
Acquisition of E.R Vessels (Notes 5 and 10) | 291,300 | 3 | 4,037 | - | - | - | 4,040 | |||||||||||||||||||||
Purchase of treasury stock (Note 10) | - | - | - | - | - | (3,145 | ) | (3,145 | ) | |||||||||||||||||||
BALANCE, December 31, 2018 | 92,627,349 | $ | 926 | $ | 2,502,429 | $ | - | $ | (980,165 | ) | $ | (3,145 | ) | $ | 1,520,045 | |||||||||||||
Net income / (loss) | - | - | - | - | (16,201 | ) | - | (16,201 | ) | |||||||||||||||||||
Issuance of vested and non-vested shares and amortization of share-based compensation (Note 13) | 883,700 | 9 | 7,934 | - | - | - | 7,943 | |||||||||||||||||||||
Dividend declared and paid ($0.05 per share) | - | - | - | - | (4,804 | ) | - | (4,804 | ) | |||||||||||||||||||
Acquisition of Songa Vessels | - | - | - | - | - | (93 | ) | (93 | ) | |||||||||||||||||||
Acquisition of E.R Vessels (Notes 5 and 10) | 999,336 | 10 | 10,055 | - | - | - | 10,065 | |||||||||||||||||||||
Purchase of treasury stock (Note 10) | (2,940,558 | ) | (29 | ) | (23,546 | ) | - | - | 3,145 | (20,430 | ) | |||||||||||||||||
Acquisition of Delphin vessels (Note 5 and 10) | 4,503,370 | 45 | 47,470 | - | - | - | 47,515 | |||||||||||||||||||||
BALANCE, December 31, 2019 | 96,073,197 | $ | 961 | $ | 2,544,342 | $ | - | $ | (1,001,170 | ) | $ | (93 | ) | $ | 1,544,040 |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net income / (loss) | $ | (9,771 | ) | $ | 58,397 | $ | (16,201 | ) | ||||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | ||||||||||||
Depreciation | 82,623 | 102,852 | 124,280 | |||||||||
Amortisation of fair value of above market time charters (Note 8) | - | - | 336 | |||||||||
Amortisation of fair value of below market time charters (Note 8) | - | (1,820 | ) | (2,349 | ) | |||||||
Amortization of debt issuance costs (Note 9) | 2,660 | 3,253 | 5,590 | |||||||||
Loss on debt extinguishment (Note 9) | 1,257 | 2,383 | 3,526 | |||||||||
Impairment loss (Note 5) | - | 17,784 | 3,411 | |||||||||
Loss / (gain) on sale of vessels (Note 5) | (2,598 | ) | - | 5,493 | ||||||||
Provision for doubtful debts | - | 722 | 1,607 | |||||||||
Share-based compensation (Note 13) | 9,267 | 8,072 | 7,943 | |||||||||
Non-cash effects of derivative financial instruments | (1,821 | ) | (1,230 | ) | - | |||||||
Fair value hedge adjustment (Note 20) | - | (1,609 | ) | - | ||||||||
Change in fair value of forward freight derivatives and bunker swaps (Note 20) | (36 | ) | 1,339 | 246 | ||||||||
Other non-cash charges | 144 | 108 | 28 | |||||||||
Amortization of deferred gain | (52 | ) | - | - | ||||||||
Gain on hull and machinery claims (Note 11) | (456 | ) | (309 | ) | (2,264 | ) | ||||||
Equity in income of investee | (93 | ) | (45 | ) | (54 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase)/Decrease in: | ||||||||||||
Trade accounts receivable | (5,949 | ) | (22,266 | ) | (20,383 | ) | ||||||
Inventories | (4,811 | ) | (8,091 | ) | (23,717 | ) | ||||||
Prepaid expenses and other receivables | (43 | ) | (7,545 | ) | (14,940 | ) | ||||||
Due from related parties | 745 | (1,091 | ) | 732 | ||||||||
Due from managers | 1,430 | (284 | ) | (615 | ) | |||||||
Other non-current assets | - | (1,972 | ) | (357 | ) | |||||||
Increase/(Decrease) in: | ||||||||||||
Accounts payable | 4,709 | 10,288 | 3,627 | |||||||||
Due to related parties | (127 | ) | 1,420 | 2,368 | ||||||||
Accrued liabilities | (863 | ) | 3,827 | 11,675 | ||||||||
Due to managers | 1,420 | 2,337 | 2,024 | |||||||||
Deferred revenue | 5,169 | 2,489 | (3,481 | ) | ||||||||
Net cash provided by / (used in) Operating Activities | 82,804 | 169,009 | 88,525 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||
Advances for vessels under construction and acquisition of vessels and other fixed assets | (143,684 | ) | (328,634 | ) | (347,140 | ) | ||||||
Cash proceeds from vessel sales (Note 5) | 15,153 | - | 56,632 | |||||||||
Hull and machinery insurance proceeds | 1,430 | 3,307 | 10,671 | |||||||||
Net cash provided by / (used in) Investing Activities | (127,101 | ) | (325,327 | ) | (279,837 | ) | ||||||
Cash Flows from Financing Activities: | ||||||||||||
Proceeds from bank loans, leases and notes | 160,780 | 987,980 | 768,282 | |||||||||
Loan and lease prepayments and repayments | (86,262 | ) | (875,037 | ) | (623,892 | ) | ||||||
Financing and debt extinguishment fees paid | (2,910 | ) | (13,818 | ) | (15,366 | ) | ||||||
Dividends paid | - | - | (4,804 | ) | ||||||||
Proceeds from issuance of common stock | 51,454 | - | - | |||||||||
Offering expenses paid related to the issuance of common stock | (1,027 | ) | (532 | ) | - | |||||||
Repurchase of common shares | - | (3,145 | ) | (20,523 | ) | |||||||
Refund of financing premia | - | 1,247 | - | |||||||||
Net cash provided by / (used in) Financing Activities | 122,035 | 96,695 | 103,697 | |||||||||
Net increase/(decrease) in cash and cash equivalents and restricted cash | 77,738 | (59,623 | ) | (87,615 | ) | |||||||
Cash and cash equivalents and restricted cash at beginning of period | 195,762 | 273,500 | 213,877 | |||||||||
Cash and cash equivalents and restricted cash at end of period | $ | 273,500 | $ | 213,877 | $ | 126,262 | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||
Cash paid during the year for: | ||||||||||||
Interest | $ | 50,227 | $ | 65,158 | $ | 82,172 | ||||||
Non-cash investing and financing activities: | ||||||||||||
Shares issued in connection with vessel acquisitions | - | 373,565 | 57,580 | |||||||||
Vessel upgrades | - | - | 27,848 | |||||||||
Reconciliation of (a) cash and cash equivalents, and restricted cash reported within the consolidated balance sheets to (b) the total amount of such items reported in the statements of cash flows: | ||||||||||||
Cash and cash equivalents | $ | 257,911 | $ | 204,921 | $ | 117,819 | ||||||
Restricted cash, current (Note 9) | 7,169 | 6,435 | 7,422 | |||||||||
Restricted cash, non-current (Note 9) | 8,420 | 2,521 | 1,021 | |||||||||
Cash and cash equivalents and restricted cash at end of period shown in the statement of cash flows | $ | 273,500 | $ | 213,877 | $ | 126,262 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
1. | Basis of Presentation and General Information: |
Wholly Owned Subsidiaries | Vessel Name | DWT | Date Delivered to Star Bulk | Year Built | |
1 | Sea Diamond Shipping LLC | Goliath | 209,537 | July 15, 2015 | 2015 |
2 | Pearl Shiptrade LLC | Gargantua | 209,529 | April 2, 2015 | 2015 |
3 | Star Ennea LLC | Star Poseidon | 209,475 | February 26, 2016 | 2016 |
4 | Coral Cape Shipping LLC | Maharaj | 209,472 | July 15, 2015 | 2015 |
5 | Star Castle II LLC | Star Leo (1) | 207,939 | May 14, 2018 | 2018 |
6 | ABY Eleven Ltd | Star Laetitia | 207,896 | August 3, 2018 | 2017 |
7 | Domus Shipping LLC | Star Ariadne | 207,812 | March 28, 2017 | 2017 |
8 | Star Breezer LLC | Star Virgo | 207,810 | March 1, 2017 | 2017 |
9 | Star Seeker LLC | Star Libra (1) | 207,765 | June 6, 2016 | 2016 |
10 | ABY Nine Ltd | Star Sienna | 207,721 | August 3, 2018 | 2017 |
11 | Clearwater Shipping LLC | Star Marisa | 207,709 | March 11 2016 | 2016 |
12 | ABY Ten Ltd | Star Karlie | 207,566 | August 3, 2018 | 2016 |
13 | Star Castle I LLC | Star Eleni (1) | 207,555 | January 3, 2018 | 2018 |
14 | Festive Shipping LLC | Star Magnanimus | 207,490 | March 26, 2018 | 2018 |
15 | New Era II Shipping LLC | Debbie H | 206,861 | May 28, 2019 | 2019 |
16 | New Era III Shipping LLC | Star Ayesha | 206,852 | July 15, 2019 | 2019 |
17 | New Era I Shipping LLC | Katie K | 206,839 | April 16, 2019 | 2019 |
18 | Cape Ocean Maritime LLC | Leviathan | 182,511 | September 19, 2014 | 2014 |
19 | Cape Horizon Shipping LLC | Peloreus | 182,496 | July 22, 2014 | 2014 |
20 | Star Nor I LLC | Star Claudine (1) | 181,258 | July 6, 2018 | 2011 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
1. | Basis of Presentation and General Information – (continued): |
Wholly Owned Subsidiaries | Vessel Name | DWT | Date Delivered to Star Bulk | Year Built | |
21 | Star Nor II LLC | Star Ophelia (1) | 180,716 | July 6, 2018 | 2010 |
22 | Christine Shipco LLC | Star Martha | 180,274 | October 31, 2014 | 2010 |
23 | Sandra Shipco LLC | Star Pauline | 180,233 | December 29, 2014 | 2008 |
24 | Pacific Cape Shipping LLC | Pantagruel | 180,181 | July 11, 2014 | 2004 |
25 | Star Borealis LLC | Star Borealis | 179,678 | September 9, 2011 | 2011 |
26 | Star Polaris LLC | Star Polaris | 179,546 | November 14, 2011 | 2011 |
27 | Star Nor III LLC | Star Lyra (1) | 179,147 | July 6, 2018 | 2009 |
28 | Star Regg II LLC | Star Janni | 178,978 | January 7, 2019 | 2010 |
29 | Star Regg I LLC | Star Marianne | 178,906 | January 14, 2019 | 2010 |
30 | Star Trident V LLC | Star Angie | 177,931 | October 29, 2014 | 2007 |
31 | Sky Cape Shipping LLC | Big Fish | 177,662 | July 11, 2014 | 2004 |
32 | Global Cape Shipping LLC | Kymopolia | 176,990 | July 11, 2014 | 2006 |
33 | Star Trident XXV Ltd. | Star Triumph | 176,343 | December 8, 2017 | 2004 |
34 | ABY Fourteen Ltd | Star Scarlett | 175,800 | August 3, 2018 | 2014 |
35 | ABY Fifteen Ltd | Star Audrey | 175,125 | August 3, 2018 | 2011 |
36 | Sea Cape Shipping LLC | Big Bang | 174,109 | July 11, 2014 | 2007 |
37 | ABY I LLC | Star Paola | 115,259 | August 3, 2018 | 2011 |
38 | ABM One Ltd | Star Eva | 106,659 | August 3, 2018 | 2012 |
39 | Nautical Shipping LLC | Amami | 98,681 | July 11, 2014 | 2011 |
40 | Majestic Shipping LLC | Madredeus | 98,681 | July 11, 2014 | 2011 |
41 | Star Sirius LLC | Star Sirius | 98,681 | March 7, 2014 | 2011 |
42 | Star Vega LLC | Star Vega | 98,681 | February 13, 2014 | 2011 |
43 | ABY II LLC | Star Aphrodite | 92,006 | August 3, 2018 | 2011 |
44 | Augustea Bulk Carrier Ltd | Star Piera | 91,952 | August 3, 2018 | 2010 |
45 | Augustea Bulk Carrier Ltd | Star Despoina | 91,945 | August 3, 2018 | 2010 |
46 | Star Nor IV LLC | Star Electra (1) | 83,494 | July 6, 2018 | 2011 |
47 | Star Alta I LLC | Star Angelina | 82,981 | December 5, 2014 | 2006 |
48 | Star Alta II LLC | Star Gwyneth | 82,790 | December 5, 2014 | 2006 |
49 | Star Trident I LLC | Star Kamila | 82,769 | September 3, 2014 | 2005 |
50 | Star Nor VI LLC | Star Luna (1) | 82,687 | July 6, 2018 | 2008 |
51 | Star Nor V LLC | Star Bianca (1) | 82,672 | July 6, 2018 | 2008 |
52 | Grain Shipping LLC | Pendulum | 82,619 | July 11, 2014 | 2006 |
53 | Star Trident XIX LLC | Star Maria | 82,598 | November 5, 2014 | 2007 |
54 | Star Trident XII LLC | Star Markella | 82,594 | September 29, 2014 | 2007 |
55 | Star Trident IX LLC | Star Danai | 82,574 | October 21, 2014 | 2006 |
56 | ABY Seven Ltd | Star Jeanette | 82,567 | August 3, 2018 | 2014 |
57 | Star Trident XI LLC | Star Georgia | 82,298 | October 14, 2014 | 2006 |
58 | Star Trident VIII LLC | Star Sophia | 82,269 | October 31, 2014 | 2007 |
59 | Star Trident XVI LLC | Star Mariella | 82,266 | September 19, 2014 | 2006 |
60 | Star Trident XIV LLC | Star Moira | 82,257 | November 19, 2014 | 2006 |
61 | Star Trident XVIII LLC | Star Nina | 82,224 | January 5, 2015 | 2006 |
62 | Star Trident X LLC | Star Renee | 82,221 | December 18, 2014 | 2006 |
63 | Star Trident II LLC | Star Nasia | 82,220 | August 29, 2014 | 2006 |
64 | Star Trident XIII LLC | Star Laura | 82,209 | December 8, 2014 | 2006 |
65 | Star Trident XV LLC | Star Jennifer | 82,209 | April 15, 2015 | 2006 |
66 | Star Nor VIII LLC | Star Mona (1) | 82,188 | July 6, 2018 | 2012 |
67 | Star Trident XVII LLC | Star Helena | 82,187 | December 29, 2014 | 2006 |
68 | Star Nor VII LLC | Star Astrid (1) | 82,158 | July 6, 2018 | 2012 |
69 | Waterfront Two Ltd | Star Alessia | 81,944 | August 3, 2018 | 2017 |
70 | Star Nor IX LLC | Star Calypso (1) | 81,918 | July 6, 2018 | 2014 |
71 | Star Gaia LLC | Star Charis | 81,711 | March 22, 2017 | 2013 |
72 | Star Elpis LLC | Star Suzanna | 81,711 | May 15, 2017 | 2013 |
73 | Mineral Shipping LLC | Mercurial Virgo | 81,545 | July 11, 2014 | 2013 |
74 | Star Nor X LLC | Stardust (1) | 81,502 | July 6, 2018 | 2011 |
(1) | Subject to a bareboat charter with purchase obligation at the expiration of the bareboat charter term (Note 7) |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
1. | Basis of Presentation and General Information – (continued): |
Wholly Owned Subsidiaries | Vessel Name | DWT | Date Delivered to Star Bulk | Year Built | |
75 | Star Nor XI LLC | Star Sky (1) | 81,466 | July 6, 2018 | 2010 |
76 | ABY III LLC | Star Lydia | 81,187 | August 3, 2018 | 2013 |
77 | ABY IV LLC | Star Nicole | 81,120 | August 3, 2018 | 2013 |
78 | ABY Three Ltd | Star Virginia | 81,061 | August 3, 2018 | 2015 |
79 | Star Nor XII LLC | Star Genesis (1) | 80,705 | July 6, 2018 | 2010 |
80 | Star Nor XIII LLC | Star Flame (1) | 80,448 | July 6, 2018 | 2011 |
81 | Star Trident III LLC | Star Iris | 76,466 | September 8, 2014 | 2004 |
82 | Star Trident XX LLC | Star Emily | 76,417 | September 16, 2014 | 2004 |
83 | Orion Maritime LLC | Idee Fixe (1) | 63,458 | March 25, 2015 | 2015 |
84 | Primavera Shipping LLC | Roberta (1) | 63,426 | March 31, 2015 | 2015 |
85 | Success Maritime LLC | Laura (1) | 63,399 | April 7, 2015 | 2015 |
86 | Ultra Shipping LLC | Kaley (1) | 63,283 | June 26, 2015 | 2015 |
87 | Blooming Navigation LLC | Kennadi | 63,262 | January 8, 2016 | 2016 |
88 | Jasmine Shipping LLC | Mackenzie | 63,226 | March 2, 2016 | 2016 |
89 | STAR LIDA I SHIPPING LLC | Apus (1) | 63,123 | July 16, 2019 | 2014 |
90 | Star Nor XV LLC | Star Wave (1) | 61,491 | July 6, 2018 | 2017 |
91 | Star Challenger I LLC | Star Challenger (1) | 61,462 | December 12, 2013 | 2012 |
92 | Star Challenger II LLC | Star Fighter (1) | 61,455 | December 30, 2013 | 2013 |
93 | Star Axe II LLC | Star Lutas | 61,347 | January 6, 2016 | 2016 |
94 | Aurelia Shipping LLC | Honey Badger | 61,320 | February 27, 2015 | 2015 |
95 | Rainbow Maritime LLC | Wolverine | 61,292 | February 27, 2015 | 2015 |
96 | Star Axe I LLC | Star Antares | 61,258 | October 9, 2015 | 2015 |
97 | ABY Five Ltd | Star Monica | 60,935 | August 3, 2018 | 2015 |
98 | Star Asia I LLC | Star Aquarius | 60,916 | July 22, 2015 | 2015 |
99 | Star Asia II LLC | Star Pisces (1) | 60,916 | August 7, 2015 | 2015 |
100 | Star Nor XIV LLC | Star Glory (1) | 58,680 | July 6, 2018 | 2012 |
101 | STAR LIDA XI SHIPPING LLC | Pyxis (1) | 56,615 | August 19, 2019 | 2013 |
102 | STAR LIDA VIII SHIPPING LLC | Hydrus (1) | 56,604 | August 8, 2019 | 2013 |
103 | STAR LIDA IX SHIPPING LLC | Leo (1) | 56,582 | July 15, 2019 | 2013 |
104 | Star Trident VII LLC | Diva | 56,582 | July 24, 2017 | 2011 |
105 | STAR LIDA VI SHIPPING LLC | D.Centaurus (1) | 56,559 | September 18, 2019 | 2012 |
106 | STAR LIDA VII SHIPPING LLC | Hercules (1) | 56,545 | July 16, 2019 | 2012 |
107 | STAR LIDA X SHIPPING LLC | Pegasus (1) | 56,540 | July 15, 2019 | 2013 |
108 | STAR LIDA III SHIPPING LLC | Cepheus (1) | 56,539 | July 16, 2019 | 2012 |
109 | STAR LIDA IV SHIPPING LLC | Columba (1) | 56,530 | July 23, 2019 | 2012 |
110 | STAR LIDA V SHIPPING LLC | Dorado (1) | 56,507 | July 16, 2019 | 2013 |
111 | STAR LIDA II SHIPPING LLC | Aquila (1) | 56,506 | July 15, 2019 | 2012 |
112 | Star Regg III LLC | Star Bright | 55,783 | October 10, 2018 | 2010 |
113 | Glory Supra Shipping LLC | Strange Attractor | 55,742 | July 11, 2014 | 2006 |
114 | Star Omicron LLC | Star Omicron | 53,489 | April 17, 2008 | 2005 |
115 | Star Zeta LLC | Star Zeta | 52,994 | January 2, 2008 | 2003 |
116 | Star Theta LLC | Star Theta | 52,425 | December 6, 2007 | 2003 |
Total dwt | 12,859,300 |
(1) | Subject to a bareboat charter with purchase obligation at the expiration of the bareboat charter term (Note 7) |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
1. | Basis of Presentation and General Information – (continued): |
Wholly Owned Subsidiaries | |||
1 | Star Bulk Management Inc. | 37 | Cape Confidence Shipping LLC |
2 | Starbulk S.A. | 38 | Cape Runner Shipping LLC |
3 | Star Bulk Manning LLC | 39 | Olympia Shiptrade LLC |
4 | Star Bulk Shipmanagement Company (Cyprus) Limited | 40 | Victory Shipping LLC |
5 | Candia Shipping Limited (ex Optima Shipping Limited) | 41 | Star Cape I LLC |
6 | Star Omas LLC | 42 | Star Cape II LLC |
7 | Star Synergy LLC | 43 | Positive Shipping Company |
8 | Oceanbulk Shipping LLC | 44 | OOCape1 Holdings LLC |
9 | Oceanbulk Carriers LLC | 45 | Oday Marine LLC |
10 | International Holdings LLC | 46 | Searay Maritime LLC |
11 | Star Ventures LLC | 47 | Lowlands Beilun Shipco LLC |
12 | Star Logistics LLC (ex Dry Ventures LLC) | 48 | Star Trident VI LLC |
13 | Unity Holding LLC | 49 | KMSRX Holdings LLC |
14 | Star Bulk (USA) LLC | 50 | Dioriga Shipping Co. |
15 | Star Trident XXI LLC | 51 | Star Trident XXX LLC |
16 | Star Trident XXIV LLC | 52 | Star Trident IV LLC |
17 | Star Trident XXVII LLC | 53 | Pacific Ventures Holdings LLC |
18 | Star Trident XXXI LLC | 54 | Star Mare LLC |
19 | Star Trident XXIX LLC | 55 | Star Regg IV LLC |
20 | Star Trident XXVIII LLC | 56 | Star Regg V LLC |
21 | Star Trident XXVI LLC | 57 | Star Regg VI LLC |
22 | Star Trident XXII LLC | 58 | Star Regg VII LLC |
23 | Star Trident XXIII LLC | 59 | Star Sege Ltd |
24 | Star Alpha LLC | 60 | Star Gamma LLC |
25 | Star Bulk Norway AS | 61 | Star Delta LLC |
26 | Star New Era LLC | 62 | Star Epsilon LLC |
27 | Star Thor LLC | 63 | Star Kappa LLC |
28 | Star ABY LLC | 64 | Star Aurora LLC |
29 | ABY Group Holding Ltd | 65 | Star Uranus LLC |
30 | Star Regina LLC | 66 | Star Trident VII LLC |
31 | Star Logistics Management S.A. | 67 | Star Trident XII LLC |
32 | Gravity Shipping LLC | 68 | Star Trident XIII LLC |
33 | White Sand Shipping LLC | 69 | Star Trident XVI LLC |
34 | Premier Voyage LLC | 70 | Star Bulk (Singapore) Pte. Ltd |
35 | L.A. Cape Shipping LLC | 71 | Star Bulk Germany GmbH |
36 | Star Cosmo LLC |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
1. | Basis of Presentation and General Information - (continued): |
Charterer | 2017 | 2018 | 2019 | |||
A | N/A | 15% | 13% | |||
B | 14% | N/A | N/A |
2. | Significant Accounting policies: |
a) | Principles of consolidation: The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), which include the accounts of Star Bulk and its wholly owned subsidiaries referred to in Note 1 above. All intercompany balances and transactions have been eliminated on consolidation. |
b) | Equity method investments: Investments in the equity of entities over which the Company exercises significant influence, but does not exercise control are accounted for by the equity method of accounting. Under this method, the Company records such an investment at cost and adjusts the carrying amount for its share of the earnings or losses of the entity subsequent to the date of investment and reports the recognized earnings or losses in income. The Company also evaluates whether a loss in value of an investment that is other than a temporary decline should be recognized. Evidence of a loss in value might include absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. Dividends received reduce the carrying amount of the investment. When the Company’s share of losses in an entity accounted for by the equity method equals or exceeds its interest in the entity, the Company does not recognize further losses, unless the Company has made advances, incurred obligations and made payments on behalf of the entity. |
c) | Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant Accounting policies - (continued): |
d) | Comprehensive income/(loss): The statement of comprehensive income/(loss) presents the change in equity (net assets) during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by shareholders and distributions to shareholders. Reclassification adjustments are presented out of accumulated other comprehensive income/(loss) on the face of the statement in which the components of other comprehensive income/(loss) are presented or in the notes to the financial statements. The Company follows the provisions of ASC 220 “Comprehensive Income”, and presents items of net income/(loss), items of other comprehensive income/(loss) and total comprehensive income/(loss) in two separate and consecutive statements. |
e) | Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and restricted cash, trade accounts receivable and derivative contracts (including freight derivatives, bunker derivatives and interest rate swaps). The Company’s policy is to place cash and cash equivalents, and restricted cash with financial institutions evaluated as being creditworthy. Cash and cash equivalents and restricted cash are therefore exposed to minimal credit risk. The Company may be exposed to credit risk in the event of non-performance by counter parties to derivative contracts. To manage this risk, the Company has adopted a policy of no exposure in over-the-counter transactions by selecting freight derivatives and bunker swaps that clear through reputable clearing houses, including the London Clearing House (“LCH”). The Company performs periodic evaluations of the relative credit standing of those financial institutions with which the Company transacts. In addition the Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition. |
f) | Foreign currency transactions: The functional currency of the Company is the U.S. Dollar since its vessels operate in the international shipping markets, and therefore primarily transact business in U.S. Dollars. The Company’s books of accounts are maintained in U.S. Dollars. Transactions involving other currencies during the period are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the consolidated balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are converted into U.S. Dollars at the period-end exchange rates. Resulting gains/(losses) are included in “Interest and other income/(loss)” in the consolidated statements of operations. |
g) | Cash and cash equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less or from which cash is readily available without penalty, to be cash equivalents. |
h) | Restricted cash: Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banks under the Company’s borrowing arrangements or derivative contracts, which are legally restricted as to withdrawal or use. In the event that the obligation to maintain such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets. Otherwise, they are classified as non-current assets. |
i) | Trade accounts receivable, net: The amount shown as Trade accounts receivable, net, at each balance sheet date, includes receivables from customers, net of any provision for doubtful debts. At each balance sheet date, the Company provides for doubtful accounts on the basis of specific identified doubtful receivables. During 2018 and 2019 the Company provided for doubtful debt of $722 and $1,607 respectively, which amounts were also written off during the same years. |
j) | Inventories: Inventories consist of lubricants and bunkers, which are stated at the lower of cost or net realizable value, which is the estimated selling prices less reasonably predictable costs of disposal and transportation. Cost is determined by the first in, first out method. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant Accounting policies - (continued): |
k) | Vessels, net: Vessels are stated at cost, which consists of the purchase price and any material expenses incurred upon acquisition, such as initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for its initial voyage, less accumulated depreciation and impairment, if any. Any subsequent expenditure, when it does not extend the useful life of the vessel, increase the earning capacity or improve the efficiency or safety of the vessel, is expensed as incurred. |
l) | Advances for vessels under construction and acquisition of vessels: Advances made to shipyards or sellers of shipbuilding contracts during construction periods or advances made to sellers of secondhand vessels to be acquired are classified as “Advances for vessels under construction and acquisition of vessels” until the date of delivery and acceptance of the vessel, at which date they are reclassified to “Vessels and other fixed assets, net.” Advances for vessels under construction also include supervision costs, amounts paid under engineering contracts, and other expenses directly related to the construction of the vessel or the preparation of the vessel for its initial voyage. Interest cost incurred during the construction period of the vessels are also capitalized and included in the vessels’ cost. |
m) | Fair value of above/below market acquired time charters: The Company values any asset or liability arising from the market value of the time charters assumed when a vessel is acquired. Where vessels are acquired with existing time charters, the Company determines the present value of the difference between: (i) the contractual charter rate and (ii) the market rate for a charter of equivalent duration prevailing at the time the vessels are delivered. In discounting the charter rate differences in future periods, the Company uses its Weighted Average Cost of Capital (WACC) adjusted to account for the credit quality of the counterparties, as deemed necessary. Such intangible asset or liability is recognized ratably as an adjustment to revenues over the remaining term of the assumed time charter. |
n) | Impairment of long-lived assets: The Company follows guidance under ASC 360 “Property, Plant, and Equipment” related to the impairment or disposal of long-lived assets which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The standard requires that long-lived assets held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of future undiscounted net operating cash flows, excluding interest charges, expected to be generated by the use and eventual disposition of the asset is less than its carrying amount, the Company should record an impairment loss to the extent the asset’s carrying value exceeds its fair value. The Company determines the fair value of its assets based on management estimates and assumptions and by making use of available market data and taking into consideration agreed sale prices and third party valuations. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant Accounting policies - (continued): |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant Accounting policies - (continued): |
o) | Vessels held for sale: The Company classifies a vessel as being held for sale when all of the following criteria, enumerated under ASC 360 “Property, Plant, and Equipment”, are met: (i) management has committed to a plan to sell the vessel; (ii) the vessel is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; (iv) the sale of the vessel is probable, and transfer of the asset is expected to qualify for recognition as a completed sale within one year; (v) the vessel is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
p) | Financing costs: Fees paid to lenders or required to be paid to third parties on the lenders’ behalf for obtaining new loans, senior notes, for refinancing or amending existing loans or securing leases, are required to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, similar to debt discounts. These costs are amortized as interest and finance costs using the effective interest rate method over the duration of the related debt. Any unamortized balance of costs relating to debt repaid or refinanced that meet the criteria for Debt Extinguishment (see Subtopic 470-50), is expensed in the period in which the repayment is made or refinancing occurs. Any unamortized balance of costs relating to debt refinanced that do not meet the criteria for Debt Extinguishment, are amortized over the term of the refinanced debt. Other fees incurred for obtaining loan facilities whose committed loans have not been drawn on or before the balance sheet date are recorded under “Other non-current assets”, and are reclassified as a direct deduction from the carrying amount of the loan facilities once financing takes place. |
q) | Debt Modifications and extinguishments: The Company follows the provisions of ASC 470-50, “Modifications and Extinguishments” to account for all modifications or extinguishments of debt instruments, except debt that is extinguished through a troubled debt restructuring (see Subtopic 470-60) or a conversion of debt to equity securities of the debtor pursuant to conversion privileges provided in terms of the debt at issuance (see Subtopic 470-20). This Subtopic also provides guidance on whether an exchange of debt instruments with the same creditor constitutes an extinguishment and whether a modification of a debt instrument should be accounted for in the same manner as an extinguishment. In circumstances where an exchange of debt instruments or a modification of a debt instrument does not result in extinguishment accounting, this Subtopic provides guidance on the appropriate accounting treatment. |
r) | Share based compensation: Share based compensation represents the cost of shares and share options granted to employees, executive officers and to directors, for their services, and is included in “General and administrative expenses” in the consolidated statements of operations. The shares are measured at their fair value equal to the market value of the Company’s common shares on the grant date. The shares that do not contain any future service vesting conditions are considered vested shares and the total fair value of such shares is expensed on the grant date. The shares that contain a time-based service vesting condition are considered non-vested shares on the grant date and a total fair value of such shares is recognized using the accelerated method, which treats an award with multiple vesting dates as multiple awards and results in a front-loading of the costs of the award. Further, the Company accounts for restricted share award forfeitures upon occurrence. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant Accounting policies - (continued): |
s) | Dry docking and special survey expenses: Dry docking and special survey expenses are expensed when incurred. |
t) | Accounting for revenue and related expenses: The Company primarily generates its revenues from charterers for the charter hire of its vessels under time charter agreements or voyage charter agreements. Under a time charter agreement a contract is entered into for the use of a vessel for a specific period of time and a specified daily charter hire rate. Under a voyage charter agreement, a contract is made in the spot market for the use of a vessel for a specific voyage to transport a specified agreed upon cargo at a specified freight rate per ton or occasionally a lump sum amount. Under a voyage charter agreement, the charter party generally has a minimum amount of cargo and the charterer is liable for any short loading of cargo or “dead” freight. A minor part of the Company’s revenues is also generated from pool arrangements, according to which the amount allocated to each pool participant vessel, including the Company’s vessels, is determined in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool (based on the vessel’s age, design, consumption and other performance characteristics) as well as the time each vessel has spent in the pool. For those vessels that operated under the pool arrangements during the years ended December 31, 2017, 2018 and 2019 the Company considers itself the principal primarily because of its control over the service to be transferred for the charterer under those charterparties and therefore related revenues and expenses are presented gross. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant Accounting policies - (continued): |
u) | Fair value measurements: The Company follows the provisions of ASC 820, “Fair Value Measurements and Disclosures” that defines and provides guidance as to the measurement of fair value. ASC 820 creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data, for example, the reporting entity’s own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy (Note 20). |
v) | Earnings / (loss) per share: Basic earnings or loss per share are calculated by dividing net income or loss available to common shareholders by the basic weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the treasury stock method whereby all of the Company’s dilutive securities are assumed to be exercised and the proceeds used to repurchase common shares are calculated at the weighted average market price of the Company’s common shares during the relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation (Note 14). |
w) | Segment reporting: The Company reports financial information and evaluates its operations and operating results by total charter revenues and not by the type of vessel, length of vessel employment, customer or type of charter. As a result, management, including the Chief Executive Officer, who is the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus, the Company has determined that it operates under one reportable segment, that of operating dry bulk vessels. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide, subject to restrictions as per the charter agreement, and, as a result, the disclosure of geographic information is impracticable. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant Accounting policies - (continued): |
x) | Leases: On January 1, 2019, the Company adopted ASC 842 Leases (“ASC 842”), according to which lessees are required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with term of more than 12 months. For lessees, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition on the income statement. ASC 842 requires lessors to classify leases as a sales-type, direct financing, or operating leases. A lease is a sales-type lease if any one of five criteria included in ASC 842 are met, each of which indicates that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, and two other criteria included also in ASC 842 are both met, indicating that the lessor has transferred substantially all of the risks and benefits of the underlying asset to the lessee, the lease is classified as a direct financing lease. All leases that are not sales-type leases or direct financing leases are operating leases. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant accounting policies – continued: |
A) | As already discussed in Note 1, during 2018 and 2019 the Company chartered-in a number of third-party vessels to increase its operating capacity in order to satisfy its clients’ needs. All charter-in operating leases that the Company had entered into and were effective as of December 31, 2018 and during the year ended December 31, 2019 are short to medium-term leases (i.e., not exceeding 12 months, including optional extension periods). Please also refer to Note 3 for those charter-in contracts entered into with related parties. The Company elected to use the practical expedient of ASC 842 that allows for time charter-in contracts with an initial term of 12 months or less to be excluded from the operating lease right-of use assets and the corresponding lease liabilities recognition on the consolidated balance sheet. The Company continues to recognize the lease payments for all charter-in operating leases as charter-in hire expenses on the consolidated statements of operations on a straight-line basis over the lease term. Revenues generated from those charter-in vessels during the year ended 2017, 2018 and 2019 amounted to $6,153, $127,618 and $185,311, respectively and are included in Voyage revenues in the consolidated statements of operations, out of which $3,005, $18,661 and $15,253, respectively, constitute sublease income deriving from time charter agreements. Future minimum rental payments for the existing contracts as of December 31, 2019, are presented in Note 17 below. |
B) | The adoption of ASC 842 did not change the accounting for the leases already recognized on the balance sheet as capital leases under the previous leasing guidance given the transition provisions of ASC 842 and the practical expedients elected by the Company as discussed above. As such, those leases existing as of January 1, 2019, including all bareboat charter agreements that the Company had entered into that were in place as of that date, are classified as finance leases under the new leasing guidance of ASC 842, with the Company having reclassified the existing capital lease assets as of December 31, 2018 of $1,047,780 as right-of-use assets being reflected within Fixed Assets and the existing lease obligations as of December 31, 2018 of $609,737 as lease liabilities being reflected within Lease financing. The weighted-average discount rate for the Company’s bareboat charter agreements for the year ended December 31, 2019 was 5.66%. Please refer to Note 7 for the description of the nature of these leases, general terms, covenants included, any variable payments, if any, as well as the purchase obligations they provide for. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant accounting policies – continued: |
C) | Each sale and lease back transaction that the Company had entered into as of December 31, 2018 and during the year ended December 31, 2019, involved a purchase obligation and was therefore treated as a failed sale or merely a financing arrangement both before and after adoption of ASC 842, and therefore was not within the scope of sale and leaseback accounting. |
D) | The Company has determined its office rental arrangements are operating leases. The office spaces that the Company leases are mostly located in Athens, Cyprus and Switzerland. Payments under these arrangements are fixed with no variable payments. The assets and liabilities recognized in respect of these agreements that correspond to the underlying rights and obligations were $1,198 as of January 1, 2019 and $1,216 as of December 31, 2019 and are presented within “Leased buildings, right-of-use assets” and “Leased buildings, operating lease liabilities” in the consolidated balance sheet. The discount rate used is 4%, being the estimated annual incremental borrowing rate for these type of assets. The lease expenses attributable to these leases are recognized on a straight line basis over the lease term and are recorded as part of General and Administrative expenses. These lease expenses were $403 and $352 for the years ended December 31, 2018 and 2019, respectively. The weighted average remaining lease term of the Company’s office rent arrangements is 3.9 years. Please also refer to Note 3 for office rent agreements entered into with related parties. Future minimum rental payments for existing contracts as of December 31, 2019, are presented in Note 17 below. |
y) | Derivatives & Hedging: |
i) | Derivative Financial Instruments: |
• | fair value hedges, when hedging the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, which in each case is attributable to a particular risk, including foreign currency risk; |
• | cash flow hedges, when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction that could affect earnings; or |
• | hedges of a net investment in a foreign operation. This type of hedge is not used by the Company. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant accounting policies – continued: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant accounting policies – continued: |
ii) | Forward Freight Agreements and Bunker Swaps: |
z) | Taxation: The Company follows the provisions of ASC 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. ASC 740-10 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. |
aa) | Offering costs: Expenses directly attributable to an equity offering are deferred and presented against paid-in capital, unless the offering is aborted, in which case they are written-off and charged to earnings. |
ab) | Share repurchases: The Company records the repurchase of its common shares at cost based on the settlement dates of repurchase transactions. Until their retirement these common shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury shares are included in authorized and issued shares but excluded from outstanding shares. |
ac) | Evaluation of purchase transactions: When the Company enters into an acquisition transaction, it determines whether the acquisition transaction was purchase of an asset or a business based on the facts and circumstances of the transaction. In accordance with Business Combinations (Topic 805): Clarifying the Definition of a Business, if substantially all of the fair value of the gross assets acquired in an acquisition transaction are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
2. | Significant accounting policies – continued: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
3. | Transactions with Related Parties: |
December 31, 2018 | December 31, 2019 | |||||||
Due from related parties | ||||||||
Oceanbulk Maritime and its affiliates (d) | $ | 85 | $ | 327 | ||||
Interchart (a) | - | 11 | ||||||
AOM (l) | - | 195 | ||||||
Starocean (j) | 65 | 41 | ||||||
Sellers of the Augustea Vessels (f) | 867 | - | ||||||
Songa Shipmanagement Ltd. (g) | 305 | - | ||||||
Product Shipping & Trading S.A. | - | 16 | ||||||
Due from related parties | $ | 1,322 | $ | 590 | ||||
Due to related parties | ||||||||
Management and Directors Fees (b) | $ | 236 | $ | 246 | ||||
Sydelle (h), (i) | 302 | 19 | ||||||
Augustea Technoservices Ltd. (f) | 1,111 | 2,879 | ||||||
Coromel Maritime Limited (m) | - | 873 | ||||||
Due to related parties | $ | 1,649 | $ | 4,017 |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Voyage expenses-Interchart (a) | $ | (3,300 | ) | $ | (3,400 | ) | (3,850 | ) | ||||
Consultancy fees (b) | (493 | ) | (534 | ) | (655 | ) | ||||||
Directors compensation (b) | (145 | ) | (159 | ) | (179 | ) | ||||||
Office rent - Combine Marine Ltd. & Alma Properties (c) | (39 | ) | (41 | ) | (39 | ) | ||||||
Voyage revenues - profit sharing agreement-Sydelle (h) | (329 | ) | (875 | ) | - | |||||||
Management fees- Augustea Technoservices Ltd. (f) | - | (2,309 | ) | (6,564 | ) | |||||||
Management fees- Songa Shipmanagement Ltd. (g) | - | (376 | ) | (32 | ) | |||||||
General and administrative expenses - Oceanbulk Maritime and its affiliates (d) | (284 | ) | (322 | ) | (324 | ) | ||||||
Charter - in hire expenses - AOM (l) | - | - | (2,589 | ) | ||||||||
Charter - in hire expenses - Sydelle (i) | - | - | (5,505 | ) | ||||||||
Charter - in hire expenses - Coromel (m) | - | - | (5,723 | ) | ||||||||
Charter - in hire expenses - Eagle Bulk (n) | - | - | (1,908 | ) |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
3. | Transactions with Related Parties – (continued): |
a) | Interchart Shipping Inc. (or “Interchart”): The Company holds 33% of the total outstanding common shares of Interchart. The ownership interest was purchased in 2014 from an entity affiliated with family members of Company’s Chief Executive Officer. This investment is accounted for as an equity method investment and is presented within “Long term investment” in the consolidated balance sheets. |
b) | Management and Directors Fees: The Company has entered into consulting agreements with companies owned and controlled by each one of its Chief Operating Officer, Co-Chief Financial Officers and Chief Strategy Officer (effective from January 1, 2019). Pursuant to the corresponding agreements, the Company is required to pay an aggregate base fee of $655 per year (this amount includes certain fees determined in Euros, using the exchange rate as of December 31, 2019, which was $1.12 per euro). Additionally pursuant to these agreements, these entities are entitled to receive an annual discretionary bonus, as determined by the Company’s Board of Directors in its sole discretion. The expenses related to the aforementioned consulting agreements for the years ended December 31, 2017, 2018 and 2019, were $493, $534 and $655, respectively, and are included under “General and administrative expenses” in the consolidated statements of operations. The expenses related to the Company’s directors for the years ended December 31, 2017, 2018 and 2019 were $145, $159 and $179, respectively, and are included under “General and administrative expenses” in the consolidated statements of operations. As of December 31, 2018 and 2019, the Company had outstanding payables of $236 and $246, respectively, to its executive officers and directors representing unpaid consulting fees or unpaid fees for their participation in the Company’s Board of Directors and other special committees. |
c) | Office rent: On January 1, 2012, Starbulk S.A. entered into a lease agreement for office space with Combine Marine Ltd., a company controlled by Mrs. Milena - Maria Pappas and by Mr. Alexandros Pappas, both of whom are children of the Company’s Chief Executive Officer. The lease agreement provides for a monthly rental of €2,500 (approximately $2.8, using the exchange rate as of December 31, 2019, which was $1.12 per euro). Unless terminated by either party, the agreement will expire in January 2024. The related rent expense for the years ended December 31, 2017, 2018 and 2019 was $35, $37 and $35, respectively, and is included under “General and administrative expenses” in the consolidated statements of operations. In addition, on December 21, 2016, Starbulk S.A., entered into a six year lease agreement for office space with Alma Properties, a company controlled by Mrs. Milena - Maria Pappas. The lease agreement provides for a monthly rental of €300 (approximately $0.3, using the exchange rate as of December 31, 2019, which was $1.12 per euro). The related rent expense for each year ended December 31, 2017, 2018 and 2019 was $4 and is included under “General and administrative expenses” in the consolidated statement of operations. |
d) | Oceanbulk Maritime S.A. (or “Oceanbulk Maritime”): Oceanbulk Maritime is a ship management company controlled by Mrs. Milena-Maria Pappas. A company affiliated to Oceanbulk Maritime provides the Company certain financial corporate development services. The related expenses for the years ended December 31, 2017, 2018 and 2019 were $284, $322 and $324, respectively, and are included under “General and administrative expenses” in the consolidated statement of operations. As of December 31, 2018 and 2019, the Company had outstanding receivables of $85 and $327 from Oceanbulk Maritime and its affiliates, respectively, for payments made on their behalf regarding certain administrative items. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
3. | Transactions with Related Parties - (continued): |
e) | Oaktree Shareholder Agreement: On July 11, 2014, the Company and Oaktree Dry Bulk Holding LLC (including affiliated funds, “Oaktree”), one of the Company’s major shareholders, entered into a shareholders agreement (the “Oaktree Shareholders Agreement”). Under the Oaktree Shareholders Agreement, Oaktree has the right to nominate four of the Company’s nine directors so long as it beneficially owns 40% or more of the Company’s outstanding voting securities. The number of directors able to be designated by Oaktree is reduced to three directors if Oaktree beneficially owns 25% or more but less than 40% of the Company’s outstanding voting securities, to two directors if Oaktree beneficially owns 15% or more but less than 25%, and to one director if Oaktree beneficially owns 5% or more but less than 15%. Oaktree’s designation rights terminate if it beneficially owns less than 5% of the Company’s outstanding voting securities. |
f) | Augustea Technoservices Ltd.: Following the completion of the acquisition of 16 operating dry bulk vessels (the “Augustea Vessels”) from entities affiliated with Augustea Atlantica SpA and York Capital Management in an all-share transaction for an aggregate of 10,277,335 of the Company’s common shares (the “Augustea Vessel Purchase Transaction”) on August 3, 2018, the Company appointed Augustea Technoservices Ltd., an entity affiliated with certain of the sellers of the corresponding transaction and specifically with one of the Company’s directors, Mr. Zagari, as the technical manager of certain of its vessels. The management fees incurred for the years ended December 31, 2018 and 2019 were $2,309 and $6,564, respectively, and are included in “Management fees” in the consolidated statements of operations. As of December 31, 2018 and 2019, the Company had outstanding payables of $1,111 and $2,879, respectively, to Augustea Technoservices Ltd. In addition, pursuant to the post-closing adjustments set forth in the underlying purchase agreement, as of December 31, 2018 the Company had an outstanding receivable of $867 from the sellers of the Augustea Vessels which was settled in 2019. |
g) | Songa Shipmanagement Ltd.: Following the completion of the acquisition of 15 operating dry bulk vessels (the ���Songa Vessels”) from Songa Bulk ASA (“Songa”) for an aggregate of 13,725,000 of the Company’s common shares (the “Songa Consideration Shares”) and $144,550 in cash (collectively the “Songa Vessel Purchase Transaction”) on July 6, 2018, the Company appointed Songa Shipmanagement Ltd, an entity affiliated with certain of the sellers of the corresponding transaction and specifically with one of the Company’s directors, Mr. Blystad, as the technical manager of certain of its vessels. The management fees incurred for the year ended December 31, 2018 were $376 and from January 1, 2019 until March 31, 2019, when the respective management agreement was terminated, the management fees incurred were $32. Both amounts are included in “Management fees” in the consolidated statements of operations. The outstanding balance due from Songa Shipmanagement Ltd as of December 31, 2018 and 2019 was $305 and nil, respectively. |
h) | Sydelle Marine Limited (or “Sydelle”) - profit sharing agreement: In April 2017, Sydelle, a company controlled by members of the family of the Company’s Chief Executive Officer, entered into a pooling agreement (the “Sydelle Profit Sharing Agreement”) with the Company’s fully owned subsidiary Domus Shipping LLC, owner of the vessel Star Ariadne, whereby the net revenues of Star Ariadne and the vessel owned by Sydelle will be equally split between the two companies. Pursuant to the Sydelle Profit Sharing Agreement, the pool adjustment for the years ended December 31, 2017 and 2018 was ($329) and ($875), respectively, which is recorded in “Voyage revenues” in the consolidated statements of operations. As of December 31, 2018, the Company had an outstanding payable amount of $302 in connection with the Sydelle Profit Sharing Agreement, which was settled in January 2019. The pooling agreement was terminated, effective December 31, 2018. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
3. | Transactions with Related Parties - (continued): |
i) | Sydelle Marine Limited (or “Sydelle”) – Charter in Agreement: During 2019, the Company entered into three freight agreements with Sydelle to charter-in its vessel. The total charter-in expense for the aforementioned freight agreements during the year ended December 31, 2019 was $5,505 and is included in “Charter-in hire expenses” in the consolidated statement of operations. As of December 31, 2019, the Company had an outstanding payable of $19 to Sydelle in connection with the respective freight agreements. |
j ) | StarOcean Manning Philippines Inc. (or “Starocean”): The Company has 25% ownership interest in Starocean, a company that is incorporated and registered with the Philippine Securities and Exchange Commission, which provides crewing agency services. The remaining 75% interest is held by local entrepreneurs. This investment is accounted for as an equity method investment, which as of December 31, 2018 and 2019 is $50 and $123, respectively and is included in “Other Current Assets” in the consolidated balance sheets, provided that is immaterial. As of December 31, 2018 and 2019, the Company has an outstanding receivable of $65 and $41, respectively, from Starocean relating to advances paid for working capital purposes. |
k ) | Oceanbulk Container Carriers LLC. (or “OCC”): On June 28, 2018, the Company completed the acquisition of three newbuilding Newcastlemax vessels (the “OCC Vessels”) from OCC, an entity affiliated with Oaktree Capital Management L.P. and with family members of the Company’s Chief Executive Officer, (the “OCC Vessel Purchase Transaction”), for an aggregate consideration of 3,304,735 common shares. |
l) | Augustea Oceanbulk Maritime Malta Ltd (or “AOM”): On September 24, 2019, the Company chartered-in the vessel AOM Marta, which is owned by AOM, an entity affiliated with Augustea Atlantica SpA and certain members of the Company’s Board of Directors. The agreed rate for chartering-in AOM Marta is index-linked, and the lease term does not exceed the period of 12 months. The charter-in expense for the year ended December 31, 2019 was $2,589 and is included in “Charter-in hire expenses” in the consolidated statement of operation. As of December 31, 2019, the Company had an outstanding receivable balance of $195 from AOM. |
m) | Coromel Maritime Limited (or “Coromel”): During 2019, the Company entered into a freight agreement with ship-owning company Coromel to charter-in its vessel. Coromel is controlled by family members of the Company’s Chief Executive Officer. The charter-in expense for the aforementioned freight agreement during the year ended December 31, 2019 was $5,723 and is included in “Charter-in hire expenses” in the consolidated statement of operations. As of December 31, 2019 the Company had an outstanding payable of $873 to Coromel. |
n) | Eagle bulk Pte. Ltd. (or “Eagle Bulk”): In 2019, the Company entered into two time charter agreements with Eagle Bulk to charter-in two of its vessels for a daily rate of $16.3 and $15.8, respectively for a period approximately of two months for each vessel. Eagle Bulk is related to Oaktree one of the Company’s major shareholder (please refer to e) above). The aggregate charter-in expense for the aforementioned time charter agreements during the year ended December 31, 2019 was $1,908 and is included in “Charter-in hire expenses” in the consolidated statement of operations. As of December 31, 2019, both the aforementioned time charter agreements have been completed and the Company had no outstanding balance with Eagle Bulk.. |
4. | Inventories: |
December 31, 2018 | December 31, 2019 | |||||||
Lubricants | $ | 12,071 | $ | 12,293 | ||||
Bunkers | 15,365 | 38,860 | ||||||
Total | $ | 27,436 | $ | 51,153 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
5. | Vessels and other fixed assets, net: |
Vessel cost | Accumulated depreciation | Net Book Value | ||||||||||
Balance, December 31, 2017 | 2,186,856 | (411,775 | ) | 1,775,081 | ||||||||
- Transfer from advances for vessels under construction and acquisition of vessels | 163,138 | - | 163,138 | |||||||||
- Acquisitions, improvements and other vessel costs | 844,474 | - | 844,474 | |||||||||
- Vessel disposal/ transfer to Held for sale | (5,949 | ) | - | (5,949 | ) | |||||||
- Impairment loss | (83,256 | ) | 65,472 | (17,784 | ) | |||||||
- Depreciation for the period | - | (102,852 | ) | (102,852 | ) | |||||||
Balance, December 31, 2018 | $ | 3,105,263 | $ | (449,155 | ) | $ | 2,656,108 | |||||
- Transfer from advances for vessels under construction and acquisition of vessels | 157,589 | - | 157,589 | |||||||||
- Acquisitions, improvements and other vessel costs | 335,671 | - | 335,671 | |||||||||
- Vessel disposal | (163,049 | ) | 106,899 | (56,150 | ) | |||||||
- Impairment loss | (24,551 | ) | 21,140 | (3,411 | ) | |||||||
- Depreciation for the period | - | (124,280 | ) | (124,280 | ) | |||||||
Balance, December 31, 2019 | $ | 3,410,923 | $ | (445,396 | ) | $ | 2,965,527 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
5. | Vessels and other fixed assets, net - (continued): |
(i) | On January 3, 2018, March 26, 2018 and May 14, 2018, the Company took delivery of the Newcastlemax vessels Star Eleni (ex-HN 1342), Star Magnanimus (ex-HN 1361) and Star Leo (ex-HN 1343) which, were financed under bareboat leases with CSSC (Note 7). |
(ii) | During the third quarter of 2018, the Company acquired the 15 Songa Vessels and the 16 Augustea Vessels (Note 3). The Songa Vessel Purchase Transaction and the Augustea Vessel Purchase Transaction were accounted for as asset acquisitions, in accordance with ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, with the cost of the vessels acquired totaling $452,661 and $327,680, respectively. The cost of the shares issued for the respective transactions was determined by reference to the Company’s closing share market price on the corresponding closing dates, which was $13.31 per share on July 6, 2018, for the Songa Vessel Purchase Transaction and $14.00 per share on August 3, 2018, for the Augustea Vessel Purchase Transaction. |
(iii) | On August 27, 2018, the Company entered into a definitive purchase agreement with entities affiliated with E.R. Capital Holding GmbH & Cie. KG, pursuant to which the Company approved the acquisition of three dry bulk vessels (the “Step 1 Vessels”) in 2018. The first of the Step 1 Vessels, Star Bright, was delivered to the Company on October 10, 2018, in exchange for 291,300 common shares and cash consideration of $9,167 with the total acquisition cost being $13,073. The cash consideration of the vessel acquisition was partially financed through the second tranche of the ABN $115,000 Facility. The cost of the shares issued in connection with this acquisition was determined by reference to the Company’s closing share market price on the delivery date, October 10, 2018, of $13.87 per share. |
(iv) | On November 16, 2018, the Company took delivery of the Ultramax vessel Star Anna, which has been acquired from a third party for a purchase price of $19,800. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
5. | Vessels and other fixed assets, net - (continued): |
i) | On April 16, 2019, May 28, 2019 and July 15, 2019, the Company took delivery of the Newcastlemax vessels Katie K (ex-HN 1388), Debbie H (ex-HN 1389) and Star Ayesha (ex-HN 1390), respectively, (together, the “OCC Vessels”) acquired through the OCC Vessel Purchase Transaction (Note 3), which were financed under bareboat leases with CSSC (Note 7). |
ii) | On January 7 and 14, 2019, the Company took delivery of the Capesize vessels Star Janni and Star Marianne, respectively, the remaining two of the Step 1 Vessels (discussed above). The vessels were delivered to the Company in exchange for an aggregate of 999,336 of its common shares and cash consideration of $31,772, with the total acquisition cost being $41,837. The cash consideration was partially financed through the third and fourth tranche of the ABN $115,000 Facility. The cost of the shares issued in connection with this acquisition was determined by reference to the Company’s closing share market prices of $10.41 and $9.66 on the delivery dates of Star Janni and Star Marianne, respectively. |
iii) | On May 27, 2019, the Company entered into an en bloc definitive agreement with entities controlled by Delphin Shipping, LLC (“Delphin”), an entity affiliated with Kelso & Company, pursuant to which it agreed to acquire 11 operating dry bulk vessels (the “Delphin Vessels”). The vessels were delivered to the Company in exchange for an aggregate of 4,503,370 of its common shares and cash consideration of $80,000, with the total acquisition cost being $127,532. The cash consideration was financed through proceeds from a new seven-year finance lease of $91,431 with China Merchants Bank Leasing (“CMBL”) (Note 7). All 11 Delphin Vessels were delivered to the Company during the third quarter of 2019. The cost of the shares issued in connection with the acquisition of Delphin Vessels was determined by reference to the Company’s closing share market prices on each delivery date of the Delphin Vessels. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
5. | Vessels and other fixed assets, net - (continued): |
6. | Advances for vessels under construction and acquisition of vessels: |
Balance, December 31, 2017 | $ | 48,574 | ||
- Additions | 129,749 | |||
- OCC Vessels shares acquisition | 42,962 | |||
- Capitalized interest | 1,753 | |||
- Transfers to Vessel cost | (163,138 | ) | ||
Balance, December 31, 2018 | 59,900 | |||
- Additions | 96,671 | |||
- Capitalized interest | 1,018 | |||
- Transfers to Vessel cost | (157,589 | ) | ||
Balance, December 31, 2019 | - |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
7. | Lease financing: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
7. | Lease financing - continued: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
7. | Lease financing - continued: |
Twelve month periods ending | Amount | |||
December 31, 2020 | $ | 69,820 | ||
December 31, 2021 | 68,255 | |||
December 31, 2022 | 66,144 | |||
December 31, 2023 | 137,160 | |||
December 31, 2024 | 25,809 | |||
December 31, 2025 and thereafter | 122,318 | |||
Total bareboat lease minimum payments | $ | 489,506 | ||
Unamortized debt issuance costs | (3,936 | ) | ||
Total bareboat lease minimum payments, net | $ | 485,570 | ||
Excluding bareboat lease interest | (63,594 | ) | ||
Lease commitments – short term | 52,145 | |||
Lease commitments – long term | 369,831 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
8. | Fair value of Above / Below Market Acquired Time Charters: |
Twelve month periods ending | Amount | |||
December 31, 2020 | $ | 1,184 | ||
December 31, 2021 | 924 | |||
December 31, 2022 | 365 | |||
Total | $ | 2,473 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt: |
i) | SEB Facility: |
ii) | E SUN Facility: |
iii) | Atradius Facility: |
iv) | ING $100,600 Facility: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt - (continued): |
v) | Citibank $62,600 Facility: |
vi) | CTBC Facility: |
vii) | NTT Facility: |
viii) | CEXIM $106,470 Facility: |
ix) | HSBC Working Capital Facility: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt - (continued): |
i) | NBG $30,000 Facility: |
ii) | Credit Agricole $43,000 Facility: |
iii) | HSBC $80,000 Facility: |
iv) | DNB $310,000 Facility: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt - (continued): |
v) | Citi $130,000 Facility: |
vi) | ABN $115,000 Facility: |
vii) | DVB $24,750 Facility: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt - (continued): |
viii) | Sinosure Facility: |
ix) | Assumed debt as part of the acquisition of Augustea Vessels: |
a) | BNP Facility: |
b) | Bank of Tokyo Facility: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt - (continued): |
x) | Issuance of 8.30% 2022 Notes: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt - (continued): |
• | pay dividends if there is an event of default under the Company’s credit facilities; |
• | incur additional indebtedness, including the issuance of guarantees, refinance or prepay any indebtedness, unless certain conditions exist; |
• | create liens on Company’s assets, unless otherwise permitted under Company’s credit facilities; |
• | change the flag, class or management of Company’s vessels or terminate or materially amend the management agreement relating to each vessel; |
• | acquire new or sell vessels, unless certain conditions exist; |
• | merge or consolidate with, or transfer all or substantially all Company’s assets to, another person; or |
• | enter into a new line of business. |
• | a minimum percentage of aggregate vessel value to secured loans (security cover ratio or “SCR”); |
• | a maximum ratio of total liabilities to market value adjusted total assets; |
• | a minimum EBITDA to interest coverage ratio; |
• | a minimum liquidity; and |
• | a minimum market value adjusted net worth. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
9. | Long-term debt - (continued): |
Twelve month periods ending | Amount | |||
December 31, 2020 | $ | 150,350 | ||
December 31, 2021 | 144,621 | |||
December 31, 2022 | 166,764 | |||
December 31, 2023 | 361,263 | |||
December 31, 2024 | 116,272 | |||
December 31, 2025 and thereafter | 186,767 | |||
Total Long term debt | $ | 1,126,037 | ||
Unamortized debt issuance costs | (15,098 | ) | ||
Total Long term debt, net | $ | 1,110,939 | ||
Current portion of long term debt | 150,350 | |||
Long term debt, net | 960,589 |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Interest on financing agreements | $ | 48,814 | $ | 69,977 | $ | 81,393 | ||||||
Less: Interest capitalized | (2,423 | ) | (1,753 | ) | (1,018 | ) | ||||||
Reclassification adjustments of interest rate swap loss/(gain) transferred to Interest and finance costs from Other Comprehensive Income (Note 18) | 852 | (3 | ) | - | ||||||||
Amortization of debt issuance costs | 2,660 | 3,253 | 5,590 | |||||||||
Other bank and finance charges | 555 | 2,241 | 1,652 | |||||||||
Interest and finance costs | $ | 50,458 | $ | 73,715 | $ | 87,617 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
10. | Preferred, Common Shares and Additional paid in capital: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
10. | Preferred, Common Shares and Additional paid in capital – (continued): |
11. | Other operational gain: |
12. | Management fees: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
13. | Equity Incentive Plans: |
• | Option type: Bermudan call option |
• | Grant Date: April 13, 2015 |
• | Expected term: Given the absence at the grant date of expected dividend payments (described below), the Company expected that it is optimal for the holders of the granted options to avoid early exercise of the options. As a result, the Company assumed that the expected term of the options is their contractual term (i.e. five years from the grant date). |
• | Expected volatility: The Company used the historical volatility of the common shares to estimate the volatility of the price of the shares underlying the share option awards. The final expected volatility estimate, which was based on historical volatility for the two years preceding the grant date, was 59.274%. |
• | Expected dividends: The Company does not currently pay any dividends to its shareholders, and the Company’s loan agreements contain restrictions and limitations on dividend payments. Based on the foregoing, the outstanding newbuilding orderbook of the Company and the market conditions prevailing in the dry bulk industry at the time of valuation, the Company’s management determined that for purposes of this calculation the Company is not expected to pay dividends before the expiration of the share options. |
• | Dilution adjustment: Compared to the number of common shares outstanding, the Company’s management considers the overall number of shares covered by the options as immaterial, and no dilution adjustment was incorporated in the valuation model.- |
• | Risk-free rate: The Company has elected to employ the risk-free yield-to-maturity rate to match the expected term of the options (which as explained above is expected to be five years from the grant date). As of the grant date, the yield-to-maturity rate of five-year U.S. Government bonds was approximately 1.3%. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
13. | Equity Incentive Plans - (continued): |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
13. | Equity Incentive Plans - (continued): |
Number of shares | Weighted Average Grant Date Fair Value | |||||||
Unvested as at January 1, 2017 | 385,000 | $ | 4.82 | |||||
Granted | 944,000 | 9.59 | ||||||
Vested | (1,049,000 | ) | 8.24 | |||||
Unvested as at December 31, 2017 | 280,000 | $ | 8.09 | |||||
Unvested as at January 1, 2018 | 280,000 | $ | 8.09 | |||||
Granted | 672,500 | 11.68 | ||||||
Vested | (809,500 | ) | 10.29 | |||||
Unvested as at December 31, 2018 | 143,000 | $ | 12.49 | |||||
Unvested as at January 1, 2019 | 143,000 | $ | 12.49 | |||||
Granted | 885,000 | 8.13 | ||||||
Vested | (756,962 | ) | 8.54 | |||||
Unvested as at December 31, 2019 | 271,038 | $ | 9.28 |
Options | Number of options | Weighted average exercise price | Weighted Average Grant Date Fair Value | |||||||||
Outstanding at beginning of period | 104,250 | $ | 27.5 | $ | 7.0605 | |||||||
Granted | - | - | - | |||||||||
Vested | - | - | - | |||||||||
Outstanding at end of period | 104,250 | $ | 27.5 | $ | 7.0605 |
14. | Earnings / (Loss) per share: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
14. | Earnings / (Loss) per share – (continued): |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Income / (Loss) : | ||||||||||||
Net income / (loss) | $ | (9,771 | ) | $ | 58,397 | $ | (16,201 | ) | ||||
Basic earnings / (loss) per share: | ||||||||||||
Weighted average common shares outstanding, basic | 63,034,394 | 77,061,227 | 93,735,549 | |||||||||
Basic earnings / (loss) per share | $ | (0.16 | ) | $ | 0.76 | $ | (0.17 | ) | ||||
Effect of dilutive securities: | ||||||||||||
Dillutive effect of non vested shares | - | 264,884 | - | |||||||||
Weighted average common shares outstanding, diluted | 63,034,394 | 77,326,111 | 93,735,549 | |||||||||
Diluted earnings / (loss) per share | $ | (0.16 | ) | $ | 0.76 | $ | (0.17 | ) |
15. | Accrued liabilities: |
December 31, 2018 | December 31, 2019 | |||||||
Audit fees | $ | 295 | $ | 232 | ||||
Legal fees | 34 | 40 | ||||||
Other professional fees | 1,502 | 1,540 | ||||||
Vessel Operating and voyage expenses | 6,514 | 37,555 | ||||||
Loan interest and financing fees | 8,277 | 7,394 | ||||||
Income tax | 232 | - | ||||||
Total Accrued Liabilities | $ | 16,854 | $ | 46,761 |
16. | Income taxes: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
16. | Income taxes – (continued): |
a) | Taxation on Marshall Islands Registered Companies and tonnage tax |
b) | Taxation on US Source Income - Shipping Income |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
16. | Income taxes – (continued): |
c) | Taxation on Maltese and Swiss Registered Companies |
17. | Commitments and Contingencies: |
a) | Legal proceedings |
b) | Other contingencies: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
17. | Commitments and Contingencies - (continued): |
c) | Commitments: |
Twelve month periods ending December 31, | ||||||||||||||||||||||||||||
+ inflows/ - outflows | Total | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 and thereafter | |||||||||||||||||||||
Future, minimum, non-cancellable charter revenue (1) | $ | 15,349 | $ | 15,349 | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
Future, minimum, charter-in hire payments (2) | (3,894 | ) | (3,894 | ) | - | - | - | - | - | |||||||||||||||||||
Vessel scrubbers (3) | (48,634 | ) | (48,634 | ) | - | - | - | - | - | |||||||||||||||||||
Office rent | (1,223 | ) | (327 | ) | (329 | ) | (314 | ) | (210 | ) | (43 | ) | - | |||||||||||||||
Total | $ | (38,402 | ) | $ | (37,506 | ) | $ | (329 | ) | $ | (314 | ) | $ | (210 | ) | $ | (43 | ) | $ | - |
(1) | The amounts represent the minimum contractual charter revenues to be generated from the existing, as of December 31, 2019, non-cancellable time charter agreements, until their expiration, net of address commission, assuming no off-hire days, other than those related to scheduled interim and special surveys of the vessels. |
(2) | The amounts represent the Company’s commitments under the existing, as of December 31, 2019, time charter-in arrangements for third party vessels. |
(3) | The amounts represent the Company’s commitments for its vessels scrubber retrofitting program that the Company entered into in 2018 and 2019. For the respective payments, the Company has obtained financing of $149,765 of which $46,227 remains undrawn as of December 31, 2019 (Note 9). |
18. | Voyage revenues: |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Time charters | $ | 240,529 | $ | 397,499 | $ | 373,927 | ||||||
Voyage charters | 102,977 | 253,812 | 437,779 | |||||||||
Pool revenues | 574 | 250 | 9,659 | |||||||||
$ | 344,080 | $ | 651,561 | $ | 821,365 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
19. | Voyage and Vessel operating expenses: |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Voyage expenses | ||||||||||||
Port charges | $ | 21,060 | $ | 37,215 | $ | 63,576 | ||||||
Bunkers | 34,997 | 72,287 | 146,089 | |||||||||
Commissions – third parties | 3,438 | 6,179 | 6,828 | |||||||||
Commissions – related parties (Note 3) | 3,300 | 3,400 | 3,850 | |||||||||
Miscellaneous | 1,887 | 2,515 | 2,619 | |||||||||
Total voyage expenses | $ | 64,682 | $ | 121,596 | $ | 222,962 | ||||||
Vessel operating expenses | ||||||||||||
Crew wages and related costs | $ | 63,074 | $ | 80,360 | $ | 103,701 | ||||||
Insurances | 6,314 | 7,544 | 10,311 | |||||||||
Maintenance, repairs, spares and stores | 18,589 | 26,368 | 25,675 | |||||||||
Lubricants | 7,016 | 8,494 | 9,833 | |||||||||
Tonnage taxes | 2,565 | 1,506 | 2,087 | |||||||||
Pre-delivery and Pre-joining expenses | 1,925 | 1,234 | 1,507 | |||||||||
Miscellaneous | 1,945 | 3,366 | 6,948 | |||||||||
Total vessel operating expenses | $ | 101,428 | $ | 128,872 | $ | 160,062 |
20. | Fair Value Measurements and Hedging: |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
20. | Fair Value Measurements and Hedging - (continued): |
Years ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Consolidated Statement of Operations | ||||||||||||
Gain/(loss) on derivative financial instruments, net | ||||||||||||
Unrealized gain/(loss) after de-designation of accounting hedging relationship (April 1, 2015) | $ | 2,802 | $ | 140 | $ | - | ||||||
Realized gain/(loss) after de-designation of accounting hedging relationship (April 1, 2015) | (2,556 | ) | (141 | ) | - | |||||||
Write-off of unrealized losses related to forecasted transactions which are no longer considered probable reclassified from other comprehensive income/(loss) | - | 708 | - | |||||||||
Ineffective portion of cash flow hedges | - | - | - | |||||||||
Total Gain/(loss) on derivative financial instruments, net | $ | 246 | $ | 707 | $ | - | ||||||
Interest and finance costs | ||||||||||||
Reclassification adjustments of interest rate swap loss/(gain) transferred to Interest and finance costs from Other comprehensive income/(loss) (Note 9) | (852 | ) | 3 | - | ||||||||
Total Gain/(loss) recognized | $ | (852 | ) | $ | 3 | $ | - | |||||
Gain/(loss) on forward freight agreements and bunker swaps | ||||||||||||
Realized gain/(loss) on forward freight agreements | (877 | ) | (599 | ) | 6,043 | |||||||
Realized gain/(loss) on bunker swaps | - | 1,491 | (1,386 | ) | ||||||||
Unrealized gain/(loss) on forward freight agreements | (24 | ) | 520 | (321 | ) | |||||||
Unrealized gain/(loss) on bunker swaps | 60 | (1,859 | ) | 75 | ||||||||
Total Gain/(loss) recognized | $ | (841 | ) | $ | (447 | ) | $ | 4,411 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
20. | Fair Value Measurements and Hedging - (continued): |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||||||||||||||
December 31, 2018 | December 31, 2019 | |||||||||||||||
(not designated as cash flow hedges) | (designated as cash flow hedges) | (not designated as cash flow hedges) | (designated as cash flow hedges) | |||||||||||||
ASSETS | ||||||||||||||||
Forward freight agreements - asset position | $ | 537 | - | $ | 216 | - | ||||||||||
Total | $ | 537 | - | $ | 216 | - | ||||||||||
LIABILITIES | ||||||||||||||||
Bunker swaps - liability position | 1,799 | - | $ | 1,724 | - | |||||||||||
Total | $ | 1,799 | - | $ | 1,724 | - |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
20. | Fair Value Measurements and Hedging - (continued): |
Long-lived assets held and used | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Impairment loss | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Held for sale | $ | - | $ | 5,949 | $ | - | $ | 1,606 | ||||||||
Vessels, net | $ | - | $ | 14,893 | $ | - | $ | 16,178 | ||||||||
TOTAL | $ | - | $ | 20,842 | $ | - | $ | 17,784 |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
20. | Fair Value Measurements and Hedging - (continued): |
Long-lived assets held and used | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Impairment loss | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Vessels, net | $ | - | $ | 24,475 | $ | - | $ | 3,411 | ||||||||
TOTAL | $ | - | $ | 24,475 | $ | - | $ | 3,411 |
21. | Subsequent Events: |
a) | On February 19, 2020, the Company declared a quarterly cash dividend of $0.05 per share which was paid on March 12, 2020, to all shareholders of record as of March 2, 2020 (“Record Date”). The ex-dividend date was February 28, 2020. |
b) | In January 2020, the Company entered into a committed term sheet with Danish Ship Finance A/S for a loan of up to $55.0 million (the “DSF $55.0 million Facility”). The facility will be available in two tranches of up to $27.5 million each, and will be used to refinance the outstanding amounts under the lease agreements of Star Eleni and Star Leo (Note 7). The two tranches are expected to be drawn on or about March 30, 2020 and will mature five years after the drawdown. The Danish $55.0 million Facility will be secured by first priority mortgages on the two vessels. |
c) | In February 2020, the Company executed the definitive loan documentation with HSBC France for an amount of up to $30.0 million in order to finance working capital requirements (the “HSBC Working Capital Facility”) (Note 9). In February 2020, an amount of $8,834 was drawn under the HSBC Working Capital Facility. In addition, on March 23, 2020 an amount of $13,123 was drawn under the HSBC Working Capital Facility and an additional amount of $2,225 is expected to be drawn on or about March 30, 2020. |
d) | In 2020 the Company entered into bunker swaps with ING Bank N.V. and Intercontinental Exchange, Inc (“ICE”) to hedge in aggregate 70,000 metric tons of its estimated fuel consumption by selling the Singapore spread between VLSFO – HSFO at an average price of $146 per ton for the period from March to December 2020 (7,000 metric tons per month). The effective date of these swaps is March 1, 2020 and the maturity date is December 31, 2020. In addition, in 2020 the Company entered into a bunker swap with ING Bank N.V. to hedge in aggregate 24,000 metric tons of its estimated fuel consumption by selling the Singapore spread between VLSFO – HSFO at an average price of $106 per ton for the period from January to December 2021 (2,000 metric tons per month). The effective date of these swaps is January 1, 2021 and the maturity date is December 31, 2021. |
December 31, 2019
(Expressed in thousands of U.S. dollars except for share and per share data unless otherwise stated)
21. | Subsequent Events - continued: |
e) | In March 2020, the Company entered into various interest rate derivative contracts with ING Bank N.V (“ING”), DNB Bank ASA (“DNB”) and Skandinaviska Enskilda Banken AB (“SEB”) to fix forward some of its floating interest rate liabilities the major terms of which are provided below: |
Counterparty | Inception | Expiry | Fixed Rate | Amortizing Notional amount | Average Annual amortization | ||||
ING | 29-Mar-20 | 29-Mar-26 | 0.70% | from $29.96 mil to $17.65 mil | $1.2 million | ||||
DNB | 30-Mar-20 | 28-Sep-23 | 0.64% | from $128.91 mil to $51.02 mil | $6.0 million | ||||
SEB | 30-Mar-20 | 28-Sep-23 | 0.63% | from $51.57 mil to $20.41 mil | $2.4 million | ||||
ING | 2-Apr-20 | 2-Oct-25 | 0.70% | from $19.69 mil to $9.84 mil | $1.9 million | ||||
ING | 2-Apr-20 | 2-Oct-25 | 0.70% | from $19.69 mil to $9.84 mil | $1.9 million | ||||
ING | 3-Apr-20 | 3-Apr-23 | 0.68% | from $16.16 mil to $12.74 mil | $0.3 million | ||||
SEB | 30-Apr-20 | 30-Jan-25 | 0.73% | from $29.44 mil to $19.25 mil | $2.7 million | ||||
SEB | 30-Apr-20 | 30-Jan-25 | 0.73% | from $29.44 mil to $19.25 mil | $2.7 million |
f) | On March 11, 2020, the World Health Organization declared the 2019 Novel Coronavirus (the “Covid-19”) outbreak a pandemic. In response to the outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have and will likely continue to cause severe trade disruptions. The extent to which Covid-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time. |