Tor Olav Troim’s 2020 Bulkers has secured a major loan for its newcastlemax newbuilding programme and has begun working on a full stock listing.
The shipowner has also revealed a time charter for one of its eight newcastlemax newbuildings, which will begin to deliver in September this year.
The developments came as Oslo-OTC listed 2020 Bulkers appointed two new directors, switched Magnus Halvorsen from the chairman to chief executive’s seat and hired former Frontline chief technical director Olav Eikrem.
The details all came to light in an update to investors today, which showed the company is acting on a plan to become an operator of the vessels rather than a simple asset play.
2020 Bulkers said a term sheet for a long-term bank loan running to $240m had been signed today.
The facility carries an interest of Libor plus 250 basis points, has an 18-year repayment profile for the principle amount and a balloon repayment after five years.
“Longer term, the company may consider other capital structures, including an all-equity financing structure, thereby giving additional flexibility with respect to dividend distributions,” 2020 Bulkers said.
The shipowner has made $67.6m in yard payments on the giant vessels at New Times in China and has $305.9m to pay on the bulkers.
It has previously raised $70m in equity in small volumes when yard payments fell due and has previously earmarked this year for a stock listing in the US.
Today it said: “The board has also resolved that the company should list on a recognised stock exchange during 2019 and have started the preparation for this.”
The presentation also reveals a three-year contract for one of its ships with multinational conglomerate. It said the deal was at a premium to the Baltic 5TC Index and illustrated the value of the newcastlemax vessel and its scrubber.
“The counterparty in the initial time charter has expressed interest to expand this deal to multiple vessels,” 2020 Bulkers said.
The company has also had several enquiries from high quality charterers interested in securing newbuildings. Long-term time charters with fixed and floating rates and contracts of affreightment were all discussed.
“The favorable fuel consumption characteristics of the vessels, as well as the fact that all the newbuildings will be delivered with scrubbers seems to be a significant driver behind the charterers’ interest,” the update said.
“The group will continue to charter the vessels to strong counterparties with a target to optimise the trading results from their operation without building a large overhead structure.”
People in position
The company has appointed Olav Eikrem as chief technical director. He had the same job for John Fredriksen’s Frontline for 15 years.
Further familiar faces from the Fredriksen system have also been named on the new 2020 Bulkers board, with Kate Blankenship and Georgina Sousa both appointed directors from January.
At the same time, Halvorsen, previously executive chairman of 2020 Bulkers, has become chief executive. He is a former high-flyer from Clarksons Platou Securities and well respected in the capital markets.
He will work alongside chief financial officer Vidar Hasund, who holds the same post at Borr Drilling.
2020 Bulkers said it would target high yield dividend payments, had an opportunistic approach to growth and M&A and a disciplined investment strategy.
However, it stressed there were no current plans to continue to build the fleet as vessel prices has risen by 20% since its own ships were contracted.
Turning to the dry bulk freight market, the company said this year and next will see fleet growth of between 0 and 1% given the downtime required to install scrubbers on trading ships.
“As the historical growth in ton mile trade for iron ore has been around 4.5% per annum over the last 20 years, the supply/demand situation looks interesting,” 2020 Bulkers concluded.
