Pacific Basin Shipping has signed agreements to buy four bulk carriers, which will be paid for with a combination of cash and shares.
The Hong Kong-based owner is buying two supramaxes and two handysizes from undisclosed sellers for $73.8m in total.
"The dry bulk market is recovering and the company sees upsides in second-hand values, and the board considers that these purchase prices are attractive," Pacific Basin said in a statement.
The consideration will be 33% funded by equity and the rest will be paid in cash, the company said on Tuesday.
"Two of the four vessels are supramaxes, allowing the company to increase its relatively lower proportion of owned versus chartered-in supramax vessels," the Hong Kong-listed company explained.
"The two handysize vessels are logs-fitted and allow the company to increase its proportion of larger handysize ships in accordance with its strategy."
Likely candidates
Pacific Basin did not reveal the names of the vessels to be acquired but revealed certain details.
The two handysize vessels are both 2015-built and are each 35,900 dwt.
One will be delivered between October and November and is costing Pacific Basin $17.2m.
The other will be delivered in March or April next year and comes with a $18.63m price tag.
The two handys are likely to be the Shikoku-built vessels Saldanha Bay and Seal Island, which Pacific Basin has had on long-term charter for at least a year, according to its website.
The company has a purchase option on Seal Island, which has been owned until now by Hakuyo Kisen of Japan.
Saldanha Bay is presently owned by Japanese owner Nissen Kaiun.
Once the vessels are delivered, Pacific Basin said their respective long-term time charters will be terminated.
This, it said, will eliminate long-term time charter costs and replace them with significantly lower owned vessel cash costs, "hence benefiting the group’s operating cash flow".
Of the two supramaxes, Pacific Basin said a 57,600-dwt bulker, built in 2015, will be acquired for $20.5m and will deliver between March and April next year.
The Tsuneishi-built vessel is likely to be the King Island, which has been owned until now by Toshin Kisen of Japan and has been on long-term charter to Pacific Basin for over a year.
The final vessel is more difficult to identify because it has not been on contract to the Hong Kong-based owner .
Pacific Basin said it is paying $17.5m for a 61,400-dwt supramax built at Imabari in 2012, which will be delivered in October or November.
Equity consideration
To fund the equity portion of the consideration, Pacific Basin will issue just over 105.9 million new shares, worth $24.4m in total.
Issuing the new shares will raise Pacific Basin's share capital by approximately 2.22%.
The shares are being issued at a price of HK$1.80 each, which represents a premium of 5.94% to the average closing price for the last 10 trading days before the ship acquisition contracts were signed.
Acquisition of the vessels is conditional on gaining approval from the Hong Kong Stock Exchange for listing of the new shares.
Pacific Basin said it expects to receive the approval "within several days".
The shipowner has been inspecting vessels for some time, but as its chief executive told TradeWinds last month: "We're picky."
Mats Berglund said in August that the company was looking for acquisition candidates "cautiously and opportunistically".
Previous to this transaction, Pacific Basin has bought a total of eight secondhand vessels over the past 18 months.
It purchased three secondhand supramaxes in April, which increased its owned fleet to 115 vessels.
