Golden Ocean to amend bank facilities to improve liquidity position

By Wendy Van Sickle

Columbus, Ohio, Feb. 18 – Golden Ocean Group Ltd. reached agreements with lenders to amendments to all of its bank loan facilities that would defer $165 million of amortization commitments, among other changes, according to a Thursday press release.

Under the agreements, beginning in April, there will be no amortizations on any of Golden Ocean’s bank facilities until Sept. 30, 2018.

Also during that same period, a minimum equity ratio will be removed and a minimum value covenant will be reduced to 100%.

A cash sweep mechanism will enable the company to deleverage when the freight market recovers.

Golden Ocean has also agreed to draw down $25 million for each remaining capesize newbuilding it has not yet taken possession of, eliminating funding risk at delivery.

The principal margins on the loans are unchanged and average 2.3%, but the company will pay an increased margin of 4.25% for the deferred amount under the loan facilities.

The agreement with the banks is conditioned upon Golden Ocean raising $200 million of equity.

The company has retained Danske Bank, DNB Markets, Arctic Securities AS, Clarksons Platou Securities AS and Nordea Markets to explore opportunities to raise the equity in a private placement.

“The refinancing creates a comfortable liquidity position while preserving an attractive and leveraged exposure to the dry bulk market,” the press release states.

During the past 12 months, the company said it has taken several measures to preserve its liquidity position, including postponing newbuilding deliveries and selling vessels and leaseback agreements.

In light of the continued weak freight markets, Golden Ocean is exploring additional measures to further preserve and improve its liquidity position, according to the release.

Golden Ocean is a dry bulk shipping company incorporated in Hamilton, Bermuda.

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