GOGL – Agreement on amended financing terms and contemplated Private Placement
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Golden Ocean Group Limited (the “Company”) is pleased to announce further proactive measures to strengthen its balance sheet, including amendment of all bank loan facilities of the Company, positive discussions with yards about further postponements of newbuilding deliveries, and a new equity issue. The refinancing creates a comfortable liquidity position while preserving an attractive and leveraged exposure to the dry bulk market.
Over the last 12 months, the Company has taken several measures to preserve its liquidity position, including postponement of newbuilding deliveries, sale of vessels, sale of newbuildings and sale & leaseback agreements. In light of the continued weak freight markets, the Company has been exploring additional measures to further preserve and improve its liquidity position to better position the Company through the current market cycle and at the same time to preserve the upside when the market improves.
Commencing from April 1, 2016, there will be no amortizations on the Company’s bank loan facilities until September 30, 2018, deferring a total of USD ~165 million of amortization commitments. Further, the minimum equity ratio will be removed and the Minimum Value Covenant will be reduced to 100% in the same period. A cash sweep mechanism will enable the Company to deleverage when the freight market recover. Further, the Company has also agreed a pre-agreed drawdown amount of USD 25m per remaining Capesize newbuilding, eliminating funding risk at delivery. The principal margins on the loans are unchanged and in average 2.3%, however the Company will pay a slightly increased margin of 4.25% for the, at any given time, deferred amount under the loan facilities. The agreement with the banks is conditional upon the Company raising USD 200m of equity.
The Company has mandated Danske Bank, DNB Markets, part of DNB Bank ASA, Arctic Securities AS, Clarksons Platou Securities AS and Nordea Markets, part of Nordea Bank Norge ASA (the “Managers”) to explore the opportunity to raise USD 200 million in a private placement (the “Private Placement”).
The Company’s largest shareholder, Hemen Holding Limited, currently controlling approximately 43.1% of the shares in the Company, as well as other leading shareholders in the Company have indicated support for subscribing to at least its pro rata share in the Private Placement.
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbour protections for forward-looking statements, which include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. Words such as “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.
In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the dry bulk market, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, 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, political events or acts by terrorists, and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission.