JANUARY 3, 2013 — Athens-headquartered Star Bulk Carriers Corp. (NASDAQ: SBLK), says it has agreed in principle with all of its lenders to amend the terms of the current loan agreements subject to the execution of definitive documentation.
In relation to the loan facilities with Commerzbank AG, Star Bulk has agreed to the deferral of payments of $16.7 million representing 60 percent of the value of the installments payable in year 2013 and 50 percent of the value of the installments payable in 2014 and to a prepayment of the loan of $2 million. The deferred amounts have been added to the loan's final installment, payable upon the expiration of the loan agreements in the fourth quarter of 2016.
In relation to the loan facility with HSH Nordbank AG (HSH), Star Bulk has agreed to the deferral of a minimum of approximately $3.5 million of the subsequent 8 consecutive quarterly installments and to the release of approximately $7.4 million of pledged cash already held by HSH in order to be applied as prepayment to the loan facility. This prepayment, which is expected to take place in January 2013, will lower the company's annual interest expenses by approximately $240,000. Under certain conditions, the company may increase the deferral of certain principal repayments up to approximately $7 million under the loan facility during 2013 and 2014.
"Finally," says Star Bulk, "all of our lenders, including ABN AMRO Bank N.V. and Credit Agricole C.I.B., have agreed to waive or amend certain of the existing financial covenants. Said covenants include the reduction of minimum liquid funds per fleet vessel to $0.5 million which will result to a $7 million reclassification of restricted cash to free cash."
Spyros Capralos, President and CEO of Star Bulk, commented: "We are pleased to have the support of our lenders during this adverse market environment. We believe our agreements with our lenders provide the company with significant liquidity and financial flexibility for the next two years and will help us withstand the current low freights and low asset values.
"Following the restructuring of our loan facilities, we estimate our cash break-even point for our available days in 2013 to be approximately $9,500 per vessel per day, a reduction of approximately $4,000 per day. In addition, by adding $7 million to the company's free cash balance, we strengthen the company and enhance its viability."
Simos Spyrou, Chief Financial Officer of Star Bulk, commented: "The agreement with our lenders improves the company's business prospects and secures our strength and competitiveness. We estimate that we will defer approximately $24 million of principal repayments out of our original $64.9 million of obligations during 2013 and 2014. This constitutes a deferral of more than 35 percent of our total repayment obligations for the next two years."
Currently, Star Bulk's fleet consists of fourteen dry bulk carriers, consisting of six Capesize vessels and eight Supramax vessels and a combined cargo carrying capacity of 1,475,005 deadweight tons and an average age of approximately 10.8 years.