Star Bulk
Historical
|
Eagle
Historical
|
Transaction
Accounting
Adjustments
|
Notes
|
Pro Forma
Combined
| ||||||||||||||||
ASSETS
| ||||||||||||||||||||
CURRENT ASSETS
| ||||||||||||||||||||
Cash and cash equivalents
|
$
|
227,481
|
$
|
118,615
|
$
|
(7,638
|
)
|
4.A
|
$
|
338,458
| ||||||||||
Restricted cash, current
|
32,248
|
-
|
2,219
|
4.B
|
34,467
| |||||||||||||||
Trade accounts receivable, net
|
68,624
|
30,917
|
-
|
99,541
| ||||||||||||||||
Inventories
|
62,362
|
24,988
|
3,713
|
4.C
|
91,063
| |||||||||||||||
Collateral on derivatives
|
-
|
2,219
|
(2,219
|
)
|
4.B
|
-
| ||||||||||||||
Due from managers
|
23
|
-
|
-
|
23
| ||||||||||||||||
Due from related parties
|
38
|
-
|
-
|
38
| ||||||||||||||||
Prepaid expenses and other receivables
|
19,296
|
5,525
|
-
|
24,821
| ||||||||||||||||
Derivatives, current asset portion
|
6,305
|
6,824
|
-
|
13,129
| ||||||||||||||||
Other current assets
|
22,830
|
458
|
-
|
23,288
| ||||||||||||||||
Vessel held for sale
|
15,190
|
-
|
-
|
15,190
| ||||||||||||||||
Total Current Assets
|
454,397
|
189,546
|
(3,925
|
)
|
640,018
| |||||||||||||||
FIXED ASSETS
| ||||||||||||||||||||
Vessels and advances for vessel upgrades, net
|
2,539,297
|
904,298
|
146,177
|
4.D.i)
|
3,589,772
| |||||||||||||||
Other fixed assets
|
446
|
1,086
|
-
|
1,532
| ||||||||||||||||
Deferred drydock costs, net
|
-
|
38,717
|
(38,717
|
)
|
4.E
|
-
| ||||||||||||||
Advances for ballast water systems and other assets
|
-
|
1,414
|
(1,414
|
)
|
4.D.iii)
|
-
| ||||||||||||||
Total Fixed Assets
|
2,539,743
|
945,515
|
106,046
|
3,591,304
| ||||||||||||||||
OTHER NON-CURRENT ASSETS
| ||||||||||||||||||||
Long term Investment
|
1,736
|
-
|
-
|
1,736
| ||||||||||||||||
Restricted cash , non-current
|
2,021
|
2,575
|
-
|
4,596
| ||||||||||||||||
Operating leases, right-of-use assets
|
27,825
|
7,182
|
-
|
35,007
| ||||||||||||||||
Derivatives, non-current asset portion
|
2,533
|
3,136
|
-
|
5,669
| ||||||||||||||||
TOTAL ASSETS
|
$
|
3,028,255
|
$
|
1,147,954
|
$
|
102,121
|
$
|
4,278,330
| ||||||||||||
LIABILITIES & STOCKHOLDERS' EQUITY
| ||||||||||||||||||||
CURRENT LIABILITIES
| ||||||||||||||||||||
Current portion of long-term bank loans
|
$
|
249,125
|
$
|
49,800
|
$
|
7,601
|
4.I.i)
|
$
|
306,526
| |||||||||||
Convertible bond debt
|
-
|
103,890
|
(34,521
|
)
|
4.G
|
69,369
| ||||||||||||||
Lease financing short term
|
2,731
|
-
|
-
|
2,731
| ||||||||||||||||
Accounts payable
|
39,317
|
21,245
|
-
|
60,562
| ||||||||||||||||
Due to managers
|
7,386
|
-
|
-
|
7,386
| ||||||||||||||||
Due to related parties
|
1,659
|
-
|
-
|
1,659
| ||||||||||||||||
Accrued liabilities
|
31,372
|
26,968
|
8,659
|
4.H
|
66,999
| |||||||||||||||
Operating lease liabilities, current
|
5,251
|
6,153
|
-
|
11,404
| ||||||||||||||||
Derivatives, current liability portion
|
5,784
|
479
|
-
|
6,263
| ||||||||||||||||
Deferred revenue
|
16,738
|
4,312
|
-
|
21,050
| ||||||||||||||||
Total Current Liabilities
|
359,363
|
212,847
|
(18,261
|
)
|
553,949
| |||||||||||||||
NON-CURRENT LIABILITIES
| ||||||||||||||||||||
Long-term bank loans, net of current portion and unamortized loan issuance costs
|
970,039
|
330,113
|
(2,202
|
)
|
4.I.ii)
|
1,297,950
| ||||||||||||||
Lease financing long term, net of unamortized lease issuance costs
|
15,208
|
-
|
-
|
15,208
| ||||||||||||||||
Derivatives, non-current liability portion
|
-
|
1,505
|
-
|
1,505
| ||||||||||||||||
Operating lease liabilities, non-current
|
22,574
|
2,576
|
-
|
25,150
| ||||||||||||||||
Other non-current liabilities
|
1,001
|
695
|
-
|
1,696
| ||||||||||||||||
TOTAL LIABILITIES
|
1,368,185
|
547,736
|
(20,463
|
)
|
1,895,458
| |||||||||||||||
SHAREHOLDERS' EQUITY
| ||||||||||||||||||||
Total Shareholders' Equity
|
1,660,070
|
600,218
|
122,584
|
4.J
|
2,382,872
| |||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
3,028,255
|
$
|
1,147,954
|
$
|
102,121
|
$
|
4,278,330
|
Star Bulk
Historical
|
Eagle
Historical
|
Transaction
Accounting
Adjustments
|
Notes
|
Pro Forma
Combined
| ||||||||||||||||
Revenues:
| ||||||||||||||||||||
Voyage revenues
|
$
|
949,269
|
$
|
393,799
|
$
|
-
|
$
|
1,343,068
| ||||||||||||
Expenses / (Income):
| ||||||||||||||||||||
Voyage expenses
|
253,843
|
106,686
|
(504
|
)
|
4.K
|
360,025
| ||||||||||||||
Charter-in hire expenses
|
17,656
|
36,534
|
-
|
54,190
| ||||||||||||||||
Vessel operating expenses
|
221,327
|
120,461
|
-
|
341,788
| ||||||||||||||||
Dry docking expenses
|
41,969
|
-
|
15,098
|
4.F.ii)
|
57,067
| |||||||||||||||
Depreciation
|
138,429
|
60,521
|
(11,316
|
)
|
4.D.ii), 4.F.i)
|
187,634
| ||||||||||||||
Management fees
|
16,809
|
-
|
-
|
16,809
| ||||||||||||||||
General and administrative expenses
|
54,413
|
43,586
|
-
|
97,999
| ||||||||||||||||
Impairment loss
|
17,838
|
-
|
-
|
17,838
| ||||||||||||||||
Loss on write-down of inventory
|
9,318
|
-
|
-
|
9,318
| ||||||||||||||||
Other operational loss
|
952
|
7,346
|
-
|
8,298
| ||||||||||||||||
Other operational gain
|
(33,980
|
)
|
-
|
-
|
(33,980
|
)
| ||||||||||||||
Loss on bad debt
|
300
|
-
|
504
|
4.K
|
804
| |||||||||||||||
(Gain)/Loss on forward freight agreements and bunker swaps, net
|
1,336
|
-
|
(1,952
|
)
|
4.L
|
(616
|
)
| |||||||||||||
Gain on sale of vessels
|
(29,399
|
)
|
(19,731
|
)
|
-
|
(49,130
|
)
| |||||||||||||
Impairment of operating lease right of use of asset
|
-
|
722
|
-
|
722
| ||||||||||||||||
Total operating expenses, net
|
710,811
|
356,125
|
1,830
|
1,068,766
| ||||||||||||||||
Operating income
|
238,458
|
37,674
|
(1,830
|
)
|
274,302
| |||||||||||||||
Other Income / (Expenses):
| ||||||||||||||||||||
Interest and finance costs
|
(71,319
|
)
|
(23,602
|
)
|
(5,826
|
)
|
4.M
|
(100,747
|
)
| |||||||||||
Interest income and other income/(loss)
|
15,228
|
6,704
|
-
|
21,932
| ||||||||||||||||
Gain/(Loss) on interest rate swaps, net
|
(3,539
|
)
|
-
|
-
|
(3,539
|
)
| ||||||||||||||
Gain/(Loss) on debt extinguishment, net
|
(5,149
|
)
|
-
|
-
|
(5,149
|
)
| ||||||||||||||
Realized and unrealized (loss)/gain on derivative instruments, net
|
-
|
1,952
|
(1,952
|
)
|
4.L
|
-
| ||||||||||||||
Total other expenses, net
|
(64,779
|
)
|
(14,946
|
)
|
(7,778
|
)
|
(87,503
|
)
| ||||||||||||
Income before taxes and equity in income of investee
|
$
|
173,679
|
$
|
22,728
|
$
|
(9,608
|
)
|
$
|
186,799
| |||||||||||
Income taxes
|
(183
|
)
|
-
|
-
|
(183
|
)
| ||||||||||||||
Income before equity in income of investee
|
173,496
|
22,728
|
(9,608
|
)
|
186,616
| |||||||||||||||
Equity in income of investee
|
60
|
-
|
-
|
60
| ||||||||||||||||
Net Income
|
173,556
|
22,728
|
(9,608
|
)
|
186,676
| |||||||||||||||
Earnings per share, basic
|
$
|
1.76
|
$
|
2.05
|
$
|
1.48
| ||||||||||||||
Earnings per share, diluted
|
1.75
|
1.96
|
1.45
| |||||||||||||||||
Weighted average number of shares outstanding, basic
|
98,457,929
|
11,090,064
|
126,411,460
| |||||||||||||||||
Weighted average number of shares outstanding, diluted
|
98,928,011
|
14,473,631
|
132,870,094
|
Amounts
| |||||
Eagle common stock
|
9,326,231
|
(a)
| |||
Eagle common stock issued to Oaktree in February 2024
|
1,098,819
|
Note 1
| |||
Equity awards
|
239,759
|
(b)
| |||
# Eagle shares issued
|
10,664,809
| ||||
Exchange ratio
|
2.6211
|
(c)
| |||
Star Bulk common stock to be issued to Eagle shareholders
|
27,953,531
|
Note 1
| |||
Star Bulk closing price per share on February 29, 2024
|
$
|
23.87
|
Note 1
| ||
Estimated consideration transferred
|
$
|
667,251
|
|
Star Bulk price per share
|
Total consideration transferred
|
Fair value of net asset value acquired minus estimated consideration transferred
|
Adjustment to depreciation for the year ended December 31, 2023
| |||||||||||||
Pro forma base case scenario
|
$
|
23.87
|
$
|
667,251
|
$
|
40,689
|
$
|
(2,683
|
)
| |||||||
Increase of 20%
|
$
|
28.64
|
$
|
800,701
|
$
|
(92,761
|
)
|
$
|
(10,782
|
)
| ||||||
Decrease of 20%
|
$
|
19.10
|
$
|
533,801
|
$
|
174,139
|
$
|
5,417
|
A. |
Cash and cash equivalents: Transaction costs to be incurred directly by Star Bulk with respect to the merger are estimated at $5,000, as depicted in the below table, and mainly consist of legal, advisory, audit and other professional fees. Please refer to the table below for analysis of the total adjustment in "Cash and cash equivalents":
|
Pro forma condensed combined balance sheet adjustments: | As of December 31, 2023 | ||||
Transaction costs | $ | (5,000 | ) | ||
Effect of the Post-Merger Refinancing | 9,812 | 4.I.iii) | |||
Cash used for regular repayments of Eagle's bank loans subsequent to December 31, 2023 and up to the merger closing date | (12,450 | ) | 4.I.ii) | ||
Cash and cash equivalents | $ | (7,638 | ) |
B. |
Restricted cash, current & Collateral on derivatives: The amount of $2,219 represents an adjustment made to conform Eagle's financial statement presentation with that of Star Bulk since Eagle presents separately the right to reclaim cash collateral or the obligation to return cash collateral from the fair value of derivative instruments.
|
C. |
Inventories: Pursuant to Eagle's accounting policies, inventories, which consist only of bunkers, are stated at cost which is determined on a first-in, first-out method, while lubricants and spares are expensed as incurred. Pursuant to Star Bulk's accounting policies, inventories consist of bunkers and lubricants, which are stated at the lower of cost or net realizable value. The amount of $3,713 represents the estimated value of Eagle's lubricants inventories and the respective adjustment made to conform Eagle's accounting policies with those of Star Bulk. No transaction accounting adjustment was made to the pro forma condensed combined income statement with respect to the corresponding effect of the consumption of Eagle's lubricants inventories, as such amount was determined to be insignificant for purposes of the pro forma condensed combined income statement.
|
D. |
Vessels and advances for vessel upgrades, net & Depreciation: The carrying value of Eagle's vessels acquired was adjusted to fair value in accordance with ASC 820, Fair Value Measurement, using a valuation obtained by a third-party vessel appraisal as of December 31, 2023. Below are described the adjustments made in relation to the above:
|
i) |
An adjustment of $180,452 was made in order to bring the carrying value of the vessels to their estimated fair value of $1,086,164 and was then increased by the estimated transaction costs expected to be incurred directly by Star Bulk of $5,000 as described above in Note 4.A and decreased by the excess of the fair value of net asset value acquired over consideration transferred of $40,689 as discussed in the Note 3 above. Please refer to the table below for analysis of the total adjustment in "Vessels and advances for vessels upgrades, net":
|
Pro forma condensed combined balance sheet adjustments:
|
As of December 31, 2023
| ||||
Fair value adjustment
|
$
|
180,452
| |||
Transaction costs
|
5,000
| ||||
Excess of the fair value of net asset value acquired over consideration transferred
|
(40,689
|
)
| |||
Advances for ballast water systems and other assets
|
1,414
|
4.D.iii)
| |||
Vessels and advances for vessel upgrades, net
|
$
|
146,177
|
ii) |
The adjustment of $2,683 reflects the additional depreciation of vessels on "Depreciation", based on the transaction accounting adjustments in "Vessels and advances for vessel upgrades, net", as described above in Note 4.D.i).
|
iii) |
The amount of $1,414 represents an adjustment made to conform Eagle's financial statement presentation with that of Star Bulk's, since Eagle presents separately advances for ballast water systems and other assets.
|
E. |
Deferred drydock costs, net: The amount of $38,717, which is the carrying value of Eagle's deferred drydock costs, net as of December 31, 2023, has been eliminated in the pro forma condensed combined balance sheet as part of the fair value measurement.
|
F. |
Depreciation & Dry docking expenses: Pursuant to Star Bulk's accounting policies, dry docking and special survey expenses are expensed when incurred. Pursuant to Eagle's accounting policies, the deferral method of accounting is applied to drydocking costs whereby actual costs incurred are deferred and amortized on a straight-line basis over the period through the date the next drydocking is required to become due.
|
i) |
the amount of $13,999, which represents the amortization of Eagle's deferred drydock costs, has been eliminated to conform Eagle's accounting policies with those of Star Bulk; and
|
ii) |
the amount of $15,098, which represents Eagle's drydocking expenditures, has been recorded as expense in the pro forma condensed combined income statement to conform Eagle's accounting policies with those of Star Bulk.
|
G. |
Convertible bond debt: The adjustment represents the elimination of the unamortized deferred financing costs of $229 as part of the fair value measurement of the convertible notes assumed and the conversion of $34,750 liability under the convertible notes into 1,098,819 shares of Eagle common stock to Oaktree, in February 2024, as described in Note 1. The convertible notes' estimated fair value of $124,920, following the conversion of $34,750, based on market data, is significantly higher than its remaining principal amount of $69,369; therefore the excess of the fair value over the face amount of $55,551 was allocated to equity under ASC 470-20.
|
Pro forma condensed combined balance sheet adjustments:
|
As of December 31, 2023
| |||
Elimination of unamortized deferred finance costs
|
$
|
229
| ||
Conversion of Oaktree's holding of convertible notes in February 2024
|
(34,750
|
)
| ||
Convertible bond debt
|
$
|
(34,521
|
)
|
H. |
Accrued liabilities: The amount of $8,659 represents an adjustment to reflect the estimated costs of severance payments pursuant to employment contracts of certain executives and employees of Eagle in case of termination in connection with a change of control and/or termination of service without cause.
|
I. |
Long-term bank loans:During March 2024, Star Bulk entered into separate committed term sheets for four loan facilities to refinance Eagle's existing long-term bank loans (the "Post-Merger Refinancing"). The aggregate amount expected to be drawn under these four facilities totals $385,312, net of financing fees, and is expected to be drawn on or around the date of the merger completion and will be used to repay amounts currently outstanding under Eagle's long-term bank loans. In connection with the Post-Merger Refinancing the below pro forma adjustments have been performed:
|
i) |
the amount of $7,601 represents the effect of the Post-Merger Refinancing on "Current portion of long-term bank loans", which is the incremental amount due within twelve months following the Post-Merger Refinancing, as compared to such amounts due under Eagle's current portion of long-term bank loans;
|
ii) |
the amount $2,202 represents the effect of the Post-Merger Refinancing on "Long-term bank loans, net of current portion and unamortized loan issuance costs", which is the incremental amount due, net of incremental financing fees, as compared to such amounts due under Eagle's long-term bank loans, as deducted by the amount of regular repayments of Eagle's bank loans subsequent to December 31, 2023 and up to the merger closing date;
|
Pro forma condensed combined balance sheet adjustments:
|
As of December 31, 2023
| |||
Effect of Post-Merger Refinancing
|
$
|
10,248
| ||
Cash used for regular repayments of Eagle's bank loans subsequent to December 31, 2023 and up to the merger closing date
|
(12,450
|
)
| ||
Long term bank loans, net of current portion and unamortized loan issuance costs
|
$
|
(2,202
|
)
|
iii) |
the amount of $9,812 (Note 4.A.) represents the effect of the Post-Merger Refinancing on "Cash and cash equivalents", which is the excess proceeds, net of incremental financing fees and repayment of Eagle's current long-term bank loans; and
|
iv) |
the amount of $8,564 (Note 4.M.) represents the effect of the Post-Merger Refinancing on "Interest and finance costs", which is the incremental amount of interest expense calculated based on the terms of the facilities underlying the Post-Merger Refinancing as compared to interest expense incurred on Eagle's current long-term bank loans.
|
J. |
Shareholders' equity: The following increases/(decreases) have been made to total shareholders' equity:
|
Capital
|
Accumulated deficit
|
Accumulated other comprehensive income/(loss)
|
Total Shareholders' Equity
| |||||||||||||
Pro forma condensed combined balance sheet adjustments:
| ||||||||||||||||
Costs of net assets acquired (Note 3)
|
$
|
667,251
|
$
|
-
|
$
|
-
|
$
|
667,251
| ||||||||
Elimination of Eagle historic equity balances
|
(748,494
|
)
|
156,727
|
(8,451
|
)
|
(600,218
|
)
| |||||||||
Adjustment related to convertible notes (Note 4.G)
|
55,551
|
-
|
-
|
55,551
| ||||||||||||
$
|
(25,692
|
)
|
$
|
156,727
|
$
|
(8,451
|
)
|
$
|
122,584
|
K. |
Voyage expenses & Loss on bad debt: The amount of $504 represents an adjustment made to conform Eagle's financial statement presentation with that of Star Bulk, since Eagle presents credit losses and bad debts within "Voyage expenses" and Star Bulk presents such amounts within "Loss on bad debt".
|
L. |
(Gain)/Loss on forward freight agreements and bunker swaps, net: The amount of $1,952 represents an adjustment made to conform Eagle's financial statement presentation with that of Star Bulk since Eagle presents gains and losses on derivative instruments within "Realized and unrealized (loss)/gains on derivative instruments, net," which is presented below "Operating income" and Star Bulk presents such amounts within "(Gain)/Loss on forward freight agreements and bunker swaps, net," which is presented above "Operating income".
|
M. |
Interest and finance costs: The amount of $2,738, as depicted in the below table, represents the elimination of the amortization of deferred financing costs in connection with the elimination of unamortized deferred financing costs on i) Convertible bond debt and ii) Long-term bank loans, respectively. Please refer to the table below for analysis of the total adjustment in "Interest and finance costs":
|
Pro forma condensed combined income statement adjustments:
|
As of December 31, 2023
| ||||
Elimination of the amortization of deferred financing costs
|
$
|
2,738
| |||
Effect of the Post-Merger Refinancing
|
(8,564
|
)
|
4.I.iv)
| ||
Interest and finance costs
|
$
|
(5,826
|
)
|
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Disclaimer
Star Bulk Carriers Corporation published this content on 15 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 20:23:38 UTC.