Safe Bulkers agrees to the novation of a Japanese newbuilding Panamax Class vessel and the sale of a Japanese newbuilding Kamsarmax Class vessel
Safe Bulkers, Inc., an international provi der of marine drybulk transportation services, an nounced today that the company has agreed to novate an existing newbuild contract for Hull No. S835, a Japanese Panamax class vessel, and sell, upon delivery, Hull No . 1551, a Japanese Kamsarmax class vessel, in each case, to entities owned by Mr. Polys Hajioannou, the Chairman of the Board and the Chief Executive Officer of the Company.
Each vessel is scheduled to be delivered in the first quarter of 2017. The two transactions were evaluated and approved by a Special Committee of the Company’s Board of Directors, which committee was wholly comprised of independent members of the Board and advised by independent counsel.
The Special Committee obtained two appraisals from independent third party brokers for each newbuild vessel , and negotiated the terms of each transaction. The higher of the two appraisals obtained from the independent third party brokers was $21.5 million for Hull No. S835 and $24.5 million for Hull No . 1551 ; or $46.0 million in the aggregate.
The remaining capital expenditure requirements of Safe Bulkers in respect of Hull No. S835 and Hull No. 1551 were $48.2 million in the aggregate. The difference of $2.2 million between the aggregate vessel valuations and the remaining aggregate capital expenditure requirements with respect to the newbuilds, as well as the commission of 1% of the contract price payable to the related party management company with respect to each of the newbuilds , have been waived in favor of the company. Through these transactions, Safe Bulkers will substantially preserve its liquidity position and avoid the need to incur additional indebtedness.
As a result of the transactions described above, Safe Bulkers will record an aggregate non - cash impairment loss of $ 16.6 milli on in the third quarter of 2016, which represents installment s already paid in respect of Hull No. S835 and Hull No. 1551.
About Safe Bulkers, Inc.
Safe Bulkers is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes for some of the world’s largest users of marine drybulk transportation services. Safe Bulkers's common stock, Series B, Series C and Series D preferred stock is listed on the NYSE, where it trades under the symbols “SB”, “SB.PR.B”, “SB.PR.C” and “SB.PR.D ”, respectively.