Western Bulk has obtained a fresh tranche of financing, which it plans to use in repaying the balance of its NOK 300m bond, according to its 2018 report.
A total of $15m (NOK 128.7m) in equity will be raised, which will be guaranteed by the Oslo-listed company’s two main shareholders, Kistefos and Ojada.
The cash will be used to repay the NOK 271m outstanding from the bond, which is due to mature this month, according to the report.
It will give Western Bulk a “strong financial platform and support further growth”, the report said.
Chief executive Jens Ismar called the transaction “a very good solution” for the company.
"With the continued strong support from our main shareholders and a business model mostly focused on short-term commitments, we are well positioned to utilise the current market volatility to our advantage,” he said.
Market outlook mixed
Western Bulk expects 2019 to present a mixed picture for dry markets, but is proceeding with caution, following a disappointing fourth quarter 2018.
So far this year, Western Bulk has repositioned its tonnage portfolio in light of a lower market, and said it aims to exploit market volatility to capture arbitrage opportunities.
“The first half of 2019 will be impacted by a delayed market recovery combined with contracts in Chile running into the first quarter of 2019, while preparations for the IMO 2020 sulphur cap is expected to provide opportunities in the second half of the year,” the company on Friday.
Western Bulk shouldered a $10m loss incurred during 2018 from a failed gamble on the Chilean market.
“Uncertainties remain around economic growth in general and specifically around the Chinese need for raw materials, combined with a continued uncertain political environment and trade wars,” Jens Ismar said in his foreword to the company’s 2018 report.
Profit after tax for the full year 2018 stood at $4.2m, a slight reduction on the $4.3m booked during 2017.
Tech investments
Western Bulk made what it called “leap into the future” during 2018 by investing in new cloud-based software systems.
The Oslo-listed company has upgraded to a new cloud-based voyage management system and group email system “within a very short timeframe”, the report said.
More investments will be made in technology this year and initiatives are already underway that will support decision-making processes for both chartering and operations, Western Bulk said.
