GOGL - Sale of two Panamax vessels and agreement to construct four Kamsarmax vessels

Rhea-AI Summary

Golden Ocean Group Limited (Nasdaq and OSE: GOGL) announced the sale of two older Panamax vessels for $37.2 million, expecting gains of approximately $4.9 million in Q3 and $5.0 million in Q4 2021. The proceeds will fund a significant portion of the equity required for four new Kamsarmax vessels, which are set for delivery in late 2023. This move enhances the fleet's fuel efficiency and aligns with the Company's commitment to modernize its operations and generate cash flows amidst a favorable dry bulk market.

Positive

• Sale of two older vessels for $37.2 million enhances liquidity.
• Expected gains of $4.9 million and $5.0 million in Q3 and Q4 2021, respectively.
• New Kamsarmax vessels are dual-fuel ready, improving operational flexibility.
• Investment in fleet modernization supports potential future cash flow generation.

Negative

• None.

Golden Ocean Group Limited (Nasdaq and OSE: GOGL) ("Golden Ocean" or the "Company"), one of the world's largest listed dry bulk shipowners, today announces the sale of two older Panamax vessels, Golden Opportunity and Golden Endurer, and an agreement to construct four Kamsarmax vessels.

The aggregate sale price of the vessels is $37.2 million, and the Company expects to record gain from sale of approximately $4.9 million in Q3 2021 and $5.0 million in Q4 2021 and receive net cash proceed of approximately $22.2 million in Q4. The net cash proceeds will fund close to half of the estimated required equity for the Kamsarmax vessels. The balance will be funded through cash on hand and long-term debt financing to be secured closer to delivery.

The four Kamsarmax vessels are 85,000 dwt ECO-type and are being constructed at the leading Chinese shipyard where the Company currently has three vessels under construction with the same design, giving added benefits in terms of building supervision and subsequently operating efficiency for sister vessels. The vessels will be delivered to the Company in the third and fourth quarter of 2023.

Ulrik Andersen, CEO of Golden Ocean Management AS commented:

"Golden Ocean is committed to maintaining one of the largest and most modern fleet in the industry through our fleet renewal and expansion program and positioning the Company to generate significant cash flows in what we believe is a fundamentally strong dry bulk market outlook. These transactions not only expand our fleet size, but they also continue to improve the fuel efficiency of the fleet, ensuring best-in-class performance at a reduced carbon footprint. Importantly, the newbuild vessels are dual-fuel ready, which provides the Company with the flexibility to evaluate alternatives as the visibility of future emissions-related regulations and technology improves.

Golden Ocean will be offsetting a portion of the cost to construct the new vessels with the net proceeds of the sale of two older less efficient vessels done at attractive prices. The Company will continue to assess opportunities to divest older tonnage at currently attractive levels. Golden Ocean will thereby be able to continue to improve its fleet composition without impacting its dividend capacity.“

October 11, 2021

The Board of Directors
Golden Ocean Group Ltd.
Hamilton, Bermuda

For further queries, please contact:

Ulrik Andersen: Chief Executive Officer, Golden Ocean Management AS
+47 22 01 73 53

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Forward-looking statements:

This release and any materials distributed in connection with this release may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company's current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

 

 

FAQ

What is the sale price of the vessels sold by Golden Ocean Group Limited?

Golden Ocean Group Limited sold two older Panamax vessels for an aggregate price of $37.2 million.

When will Golden Ocean Group Limited recognize the gains from the vessel sale?

The Company expects to record gains of approximately $4.9 million in Q3 2021 and $5.0 million in Q4 2021.

What are the delivery dates for the new Kamsarmax vessels?

The four new Kamsarmax vessels are scheduled for delivery in the third and fourth quarters of 2023.

How will the sale of older vessels impact Golden Ocean's fleet?

The sale will improve the overall fuel efficiency of Golden Ocean's fleet and support its fleet modernization strategy.

What financing will Golden Ocean Group use for the Kamsarmax vessels?

The financing will be sourced from the net cash proceeds of the sale and long-term debt financing closer to delivery.