Pangaea Logistics Solutions is spending $17.2m to buy out the remaining 50% equity ownership in four post-panamax bulkers it has operated since 2021.
The ice-class quartet from China’s Guangzhou Shipyard International was financed with the help of Connecticut alternative finance firm Hudson Structured Capital Management, whose help was instrumental in getting the newbuilding project done.
Rhode Island-based Pangaea announced the buyout, which came one year ahead of schedule, in a statement after the close of trading on the Nasdaq exchange on Monday. The transaction is expected to be completed by 1 November.
Pangaea chief executive Mark Filanowski said: “This strategic move to take full ownership of these four modern dry bulk vessels further consolidates our fleet of niche Ice Class 1A vessels, cleans up our balance sheet and improves our operating cash generation.
“We continue to pursue our strategic initiative of investing in our fleet of owned vessels, while taking advantage of the favourable macro backdrop in the dry bulk market to unlock incremental net asset value and maximise future returns on our owned fleet.”
The buyout is Pangaea’s second big announcement in two weeks. On 23 September, it disclosed the acquisition of the 15-vessel handysize bulker fleet of MT Maritime Management in a $194m all-stock transaction.
The vessels jointly financed by Pangaea and Hudson are the 95,800-dwt Nordic Siku, Nordic Nuluujaak, Nordic Qinngua and Nordic Sanngijuq (all built 2021).
They have operated in the Arctic ice trade under long-term charters with key client Baffinland Iron Mines, which encouraged Pangaea to place the order in 2019.
TradeWinds reported the background of the transaction in a June 2022 article about Hudson.
The financial firm entered the equation because Baffinland was looking for four ships, and Pangaea at the time had the financial resources for only two.
Hudson partner Jason Braunstein said in 2022: “We’re trying to work with our clients on deals that have attractive characteristics and a good level of downside protection.
“Pangaea was a classic example. They had the equity to build two of those ships for a long-term contract. They needed help, they needed four.”
While that structure is now being unwound, Filanowski had good words for Hudson as the partners part ways.
“We thank Hudson Structured Capital Management for their partnership in the expansion of our ice-class fleet, which has been instrumental since the delivery of the vessels in 2021,” he said.
