John Fredriksen’s Golden Ocean Group has amended all its bank loan facilities, further delayed newbuilds and pushed ahead with a new equity issue in what the dry bulk player describes as “further proactive measures to strengthen its balance sheet”. The deals the Fredriksen vehicle has done with its banks would suggest Norway’s richest man sees no real dry bulk upturn until the final quarter of 2018 at the earliest.
“The refinancing creates a comfortable liquidity position while preserving an attractive and leveraged exposure to the dry bulk market,” the company said in a release to the Oslo Bors.
In light of the continued weak freight markets, commencing from April 1 this year, there will be no amortisations on the company’s bank loan facilities until September 30, 2018, deferring a total of $165m of amortisation commitments. Further, the minimum equity ratio will be removed and the minimum value covenant will be reduced to 100% in the same period. A cash sweep mechanism will enable the company to deleverage when the freight market recovers.
Further, the company has also agreed a pre-agreed drawdown amount of $25m per remaining capesize newbuilding, eliminating funding risk at delivery.
The agreement with the banks is conditional upon the Golden Ocean raising $200m of equity. A private placement is now being mapped out.