Star Bulk ends ‘transformational’ year with $862 million debt

By Lisa Kerner

Charlotte, N.C., March 20 – Star Bulk Carriers Corp. ended 2014 with cash and restricted cash of about $100 million and total debt of about $862 million. This compares to $56 million and $193 million at year-end 2013, according to the company’s earnings news release.

Chief executive officer Petros Pappas called 2014 a “transformational” year for the company, one that included the merger with Oceanbulk and the acquisition of 34 vessels from Excel Maritime.

“Against a backdrop of weakening market conditions in the fourth quarter of 2014, Star Bulk reported full year revenues of $147.4 million and adjusted EBITDA of $43.6 million,” Pappas said.

Star reported fourth-quarter revenues of $65.6 million and adjusted EBITDA of $16.6 million.

“We are committed to take measures to protect our shareholders’ equity value and enhance our ability to weather what has proved as one of the most challenging dry bulk markets in the last 40 years,” said Pappas.

In terms of debt financing, Pappas said the company has successfully tapped both existing and new banking relationships to secure a total of $906 million of committed debt financing for its newbuilding vessels.

“We are currently in final negotiations with two major lending institutions for the financing of our two remaining newbuilding vessels,” he said.

Also on Friday, the company announced it entered into a committed term sheet with DNB Bank, SEB Bank and the Export-Import Bank of China for the financing of seven newbuilding vessels, for an amount of up to $227.5 million. Star Bulk has now secured financing for the 30 out of the 32 new vessels under construction.

The company has raised a total of $245 million of new equity since the new year to fund the newbuilding program and to increase cash reserves. Participating institutional investors included major shareholders Oaktree Capital Management, Monarch Alternative Capital and Angelo, Gordon & Co.

Pappas projects a challenging 2015 but remains optimistic regarding the fundamental long-term dynamics of the dry bulk industry.

The company had an operating loss for the year of $1.4 million, compared to operating income of $8.3 million for 2013.

Net loss for the year ended Dec. 31 was $11.7 million, or $0.20 per basic and diluted share. This compares to net income for 2013 of $1.9 million, or $0.13 per basic and diluted share, according to the earnings release.

Star is an Athens-based provider of transportation services for the dry bulk goods sector.

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