2020 Bulkers is using the proceeds from the sale of two vessels earlier this year to hand out a special dividend to shareholders and pay down its debt.
The Oslo-listed newcastlemax owner on Tuesday said it will distribute $1.68 per share or $38.m in total to investors.
2020 Bulkers sold a pair of five-year-old, China-built newcastlemaxes for about $128m in total during mid-February to Neda Maritime of Greece.
The 208,445-dwt Bulk Shanghai and 207,992-dwt Bulk Seoul (both built 2019) were sold in what chairman Magnus Halvorsen called an “opportunistic” sale.
“These two vessels sold were financed with a higher interest cost, as well as higher leverage than the rest of our bank-financed fleet,” he told TradeWinds in February.
“As a result of the sale, we will release substantial cash that can allow for both extraordinary return of capital to shareholders and/or further reduction of debt.”
2020 Bulkers is doing just that and is repaying $27.5m of a $162.5m term loan, which will help cut its daily cash breakeven by almost $5,000 per day.
The loan has been refinanced and amended, which will cut each of its vessels’ daily breakeven rates to $11,800, down from $16,400 per vessel per day in the final quarter of 2023.
This means the Baltic Capesize Index can fall as low as $6,800 per day before 2020 Bulkers vessels fall into negative daily earnings, based on the current scrubber price spread of $145 per tonne.
The term loan, which had been due to mature in March 2027, has been replaced with a new non-amortising $112.5m loan that will mature in April 2029.
The facility, which is effective as of Wednesday, bears interest at a rate of Sofr +195 basis points, cheaper than the previous loan.
After paying down the debt, 2020 Bulkers said it holds a cash balance of around $60m as of Tuesday.
