Globus Maritime Announces a Sale and Bareboat Back Transaction for its Vessel GLBS Magic

Rhea-AI Summary

Globus Maritime (NASDAQ: GLBS) has completed a $25 million sale and bareboat charter agreement for its bulk carrier GLBS Magic with an unrelated Japanese third party. The vessel, delivered from Nantong Cosco Khi Ship Engineering Co. shipyard in September 2024, will be bareboat chartered back with daily rates starting at $2,250 for the first three years, gradually increasing to $2,950 in the final two years of the ten-year agreement.

The deal includes a variable rate component based on Term SOFR plus 2.1% margin. Globus retains buyback options after the third year and must repurchase the vessel for $15,400,500 at the end of the ten-year term if not bought earlier. The transaction closed on December 23, 2024. The company's fleet now consists of ten dry bulk vessels with a total capacity of 734,249 dwt and an average age of 7.8 years.

Positive

• Secured $25 million from vessel sale
• Maintains operational control through bareboat charter
• Flexible buyback options after year 3
• Relatively young fleet average age of 7.8 years

Negative

• Additional daily charter costs ranging from $2,250 to $2,950
• Mandatory buyback obligation of $15.4M if not purchased earlier
• Variable rate exposure to SOFR plus 2.1% margin

Insights

Financial Analyst

This sale and leaseback transaction represents a strategic financial maneuver that enhances Globus Maritime's liquidity position by $25 million while retaining operational control of the vessel. The structured bareboat charter rates show a gradual increase from $2,250 to $2,950 per day over ten years, plus a variable component linked to Term SOFR + 2.1% margin. The final buyback obligation at $15.4 million creates an effective amortization schedule.

The deal's structure provides significant operational flexibility through buyback options after year 3, while the increasing daily rates align with projected market improvements. The $25 million sale price for a newly delivered vessel indicates strong asset valuation, considering the vessel was delivered just three months ago. The transaction improves the company's working capital while maintaining future upside potential through the buyback options.

For a company with a market cap of just $24.3 million, this transaction is particularly significant as it effectively monetizes an asset worth more than the entire market value of the company while maintaining operational control. The favorable financing terms reflect the quality of the asset and the company's standing with Japanese financiers, who are traditionally conservative lenders in the maritime sector.

Maritime Industry Expert

The sale and bareboat charter of the GLBS Magic, a modern 64,000 dwt bulk carrier, demonstrates shrewd asset management in the dry bulk sector. Japanese lessors are known for offering competitive terms in ship financing and this deal structure is particularly attractive given current market conditions. The ten-year charter period with purchase options provides operational stability while maintaining fleet renewal flexibility.

The vessel's young age and build quality from Nantong Cosco Khi, a reputable Chinese shipyard, likely contributed to securing favorable lease terms. The transaction strengthens Globus's fleet profile, which now has an impressive average age of 7.8 years - significantly younger than many competitors in the sector. This modern fleet composition positions the company well for potential environmental regulations and charterer preferences for newer, more efficient vessels.

GLYFADA, Greece, Dec. 30, 2024 (GLOBE NEWSWIRE) -- Globus Maritime Limited (“Globus” or the “Company”) (NASDAQ: GLBS), a dry bulk shipping company, announced today that it has closed a $25 million sale and bareboat agreement through its wholly owned subsidiary, Paralus Shipholding S.A., with an unrelated Japanese third party, with respect to the approximately 64,000 dwt bulk carrier “GLBS Magic” which was delivered from its builder, the Nantong Cosco Khi Ship Engineering Co., Ltd. shipyard in China on September 20, 2024. The Company has sold the GLBS Magic to an unrelated third party for $25 million and has bareboat chartered back the vessel for (i) a fixed amount equal to $2,250 per day for the first three years from the delivery date, $2,550 per day for the next two years, $2,850 per day for the three years following, and $2,950 per day for the final two years plus (ii) a variable amount priced at Term SOFR plus a 2.1% margin of the outstanding lease obligation. As part of this transaction, the Company has continuous options to buy back the vessel following the third anniversary of its delivery to the purchaser, at purchase prices stipulated in the bareboat charter depending on when the option is exercised. At the end of the ten-year period, the Company has an obligation to buy back the vessel at a purchase price of $15,400,500, if not purchased earlier. The sale and bareboat charter back transaction closed on December 23, 2024. The bareboat charter contains certain covenants and agreements customary for financing agreements of this type.

About Globus Maritime Limited

Globus is an integrated dry bulk shipping company that provides marine transportation services worldwide. The Company’s operating fleet consists of ten dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina and other dry bulk cargoes internationally, with a total carrying capacity of 734,249 dead weight tons and a weighted average age of 7.8 years as at December 30, 2024.

Safe Harbor Statement

This communication contains “forward-looking statements” as defined under U.S. federal securities laws. Forward-looking statements provide the Company’s current expectations or forecasts of future events. Forward-looking statements include statements about the Company’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or conditions. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. The Company’s actual results could differ materially from those anticipated in forward-looking statements for many reasons specifically as described in the Company’s filings with the Securities and Exchange Commission. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Globus undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this communication or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Globus describes in the reports it files from time to time with the Securities and Exchange Commission.

For further information please contact:
Globus Maritime Limited	+30 210 960 8300
Athanasios Feidakis	a.g.feidakis@globusmaritime.gr
Capital Link – New York	+1 212 661 7566
Nicolas Bornozis	globus@capitallink.com

FAQ

What is the value of Globus Maritime's (GLBS) sale and bareboat agreement for GLBS Magic?

The sale and bareboat agreement for GLBS Magic is valued at $25 million.

What are the daily charter rates for GLBS Magic under the new agreement?

The daily rates start at $2,250 for the first three years, increase to $2,550 for the next two years, $2,850 for the following three years, and $2,950 for the final two years.

When can Globus Maritime (GLBS) exercise its buyback option for GLBS Magic?

Globus can exercise buyback options after the third anniversary of the vessel's delivery to the purchaser.

What is the mandatory buyback price for GLBS Magic at the end of the ten-year term?

The mandatory buyback price at the end of the ten-year term is $15,400,500 if not purchased earlier.

What is the current size and average age of Globus Maritime's (GLBS) fleet?

Globus Maritime's fleet consists of ten dry bulk vessels with a total capacity of 734,249 dwt and an average age of 7.8 years as of December 30, 2024.