2020 Bulkers has signed an agreement to sell two newcastlemax vessels for $127.5m.
The Oslo-listed company sold the 208,445-dwt Bulk Shanghai and 207,992-dwt Bulk Seoul (both built 2019) to an unaffiliated third party, according to a statement.
The shipowner will book a net gain of about $40 million upon completion of the deal.
Both ships are on index-linked charters, expiring in March — the company’s only two ships without contracts for this year.
Chairman Magnus Halvorsen said last week after the company’s fourth-quarter earnings that it will shift exposure back to floating contracts from April in expectation of a higher spot market for capesizes.
The two vessels are currently owned by Ocean Yield under a sale-and-leaseback arrangement, and 2020 Bulkers exercised its option with Ocean Yield to carry out the sale.
The ships were acquired by the leaseback company in 2019 for $42m each.
This is the first sale from 2020 Bulkers’ modern fleet.
The price paid by the unknown buyer is 5% above Fearnley Securities’ valuation.
Delivery is expected by 1 May, with 2020 Bulkers expecting to bank cash flow of $3.5m up to that point, assuming the two vessels each perform two more China-Australia round voyages, based on the current forward freight agreement curve.
Given the recent rise in asset values and market strength, the sale is “highly attractive” and “opportunistically solid”, according to the investment bank.
The deal will increase the mark-to-market net asset value to NOK 158 ($15.03) per share, from NOK 146 previously.
The deal comes at a time of increased deals flow for newcastlemax and capesize bulkers, with the freight market enjoying an unseasonally strong run.
According to Clarksons, capesize earnings were up 30% week on week to $22,664 per day, the strongest weekly capesize earnings for February in over a decade.
As a result of the transaction, the estimated cash breakeven will be reduced by $1,900 per day to $14,500 per day.
The company’s average gross debt per vessel will decrease from about $25.7m to about $23.7m.
The board of directors will determine the allocation of the net proceeds from the transaction, which may include further debt repayments or a return of capital to shareholders.
