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Safe Bulkers rearranges finance for kamsarmax newbuilding

Safe Bulkers has novated the shipbuilding contract for a kamsarmax newbuilding to another of its wholly owned subsidiaries in order to finance $16.9m of the construction costs via an unnamed investor.

The undisclosed vessel is scheduled to be delivered in the first half of 2018, at which time its new holding company will issue $16.9m in 2.95% cumulative redeemable perpetual preferred equity to the unaffiliated investor.

“This arrangement allows the company to finance a significant portion of this newbuild through the issuance of preferred equity to the investor with a preferred dividend below 3%, avoiding the incurrence of additional indebtedness and preserving our liquidity position, while it is not dilutive for our common shareholders,” Dr. Loukas Barmparis, Safe Bulkers’ president, said in a release.

The unnamed investor may redeem the preferred equity three years after its being issued or at any time at the option of the issuer.

The shares will not entitle the investor to any voting rights but the financier will, however, be entitled to nominate one director to the issuer’s board.

NYSE-listed Safe Bulkers has two 81,000-dwt kamsarmax newbuildings and two 84,000-dwt kamsarmaxes on order. Three are being built at Imabari in Japan and one at Jiangsu New Yangzijiang in China.

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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